As we approach 2025, there are some exciting forecasts ahead for the housing market, particularly for those considering making a move in New York. Whether you're planning to buy or sell, here’s what the experts are predicting and how it could affect your real estate decisions.
Mortgage Rates Are Expected to Decline
After a few years of fluctuating rates, mortgage rates are projected to come down slightly by 2025, making it more affordable to borrow. While rates won’t drop dramatically, the gradual decline will help both buyers and sellers in the competitive New York market.
According to industry forecasts from Fannie Mae, the Mortgage Bankers Association (MBA), and the National Association of Realtors (NAR), mortgage rates are expected to average around 5.98% by the fourth quarter of 2025. This slight dip will offer some relief to buyers facing high interest rates over the past year.
How This Affects New Yorkers: In the fast-paced New York market, even a small reduction in mortgage rates can impact affordability. Lower rates mean buyers will have more purchasing power, and sellers may see increased demand as more people can qualify for mortgages.
Home Sales Are Expected to Increase
As mortgage rates ease, more buyers are expected to re-enter the market. Forecasts predict that the total number of home sales across the U.S. could rise to 5.4 million, according to the average from leading sources. This uptick in activity will make the New York real estate market busier, especially in sought-after neighborhoods.
New York City Dynamics: With increased buyer activity, expect popular boroughs like Manhattan, Brooklyn, and Queens to experience strong demand, particularly in competitive areas. Condominiums and co-ops in desirable locations will likely benefit from the influx of buyers.
Home Prices Will Continue to Rise – But at a Slower Pace
The 2025 market isn’t just about more homes selling; prices are forecasted to rise as well. However, the good news is that this rise will be more moderate than the spikes seen during the pandemic. The average home price appreciation for 2025 is projected at 2.6%, compared to double-digit gains during COVID-19.
Goldman Sachs forecasts New York price appreciation at 4.4%, one of the higher rates. Wells Fargo projects a 3.2% increase, while other forecasts also indicate steady growth.
What This Means for Sellers: If you’re thinking of selling in New York, this price appreciation means you’ll still benefit from increased property values, but buyers won’t face the same steep price hikes that have slowed the market in recent years. Expect a more balanced market, with room for negotiations but continued overall growth.
What This Means for Buyers: Buyers should be prepared for modest price increases, particularly in competitive neighborhoods like Tribeca, the Upper East Side, and Williamsburg. However, with the right strategy, opportunities to buy at a fair price will still be available.
Moving Forward: How You Can Prepare for 2025
2025 presents exciting opportunities for buyers and sellers alike, with forecasts indicating a more stable, predictable market than what we’ve seen in recent years. Whether you're a buyer looking to lock in a more favorable mortgage rate or a seller hoping to capitalize on rising home values, being prepared is key.
Connect With Me
Are you ready to make your move in 2025? Reach out to discuss what these forecasts mean for your situation and how we can strategize to make the most of your real estate goals in New York’s dynamic market.
