Mortgage rates have eased this week, despite a rise in inflation, positively impacting buyer sentiment. Rates dropped to 6.6%, and the Realtor.com 2025 Housing Forecast predicts even lower rates by next year.
The improvement in mortgage rates has led to an increase in home purchase sentiment for the fourth consecutive month. Notably, 45% of consumers now expect mortgage rates to decrease.
Lower mortgage rates benefit both buyers and sellers. Realtor.com’s weekly data shows new listings are increasing, although sellers are adjusting to a slower market by reducing asking prices.
Consumer price inflation rose slightly as falling energy prices were unable to offset increases in shelter and other costs. Core inflation also increased, with producer prices showing similar trends.
Despite rising inflation, there is still an expectation of a quarter-point rate cut at the upcoming Federal Reserve meeting. With unemployment on the rise, the Fed may continue its current path but could signal a slower pace of cuts in 2025, aligning with investor expectations.
Realtor.com has released two notable lists: November’s hottest housing markets and the Top Housing Markets for 2025. Springfield, MA was identified as the hottest market last month, while New York City showed significant improvement among large markets.
For 2025, low-cost Sun Belt markets are expected to lead in real estate transactions due to robust construction and younger populations utilizing VA and FHA loans. Colorado Springs, CO tops this list.
