Home sales are expected to go up next year, but the market isn’t likely to fully normalize even though more supply should help throttle rising prices and spur activity., which calls for a 7% to 12% increase in sales volume of existing homes and a 2% price increase to about $410,000.NAR Chief Economist Lawrence Yun said 6 million home sales would be a normal amount given current job and population dynamics.
An outlook that calls for continued price increases might not sit well with buyers, but the 2% forecast is tame compared to the price increases of recent years. Fed monetary policymakers ratcheting up their benchmark interest rate 11 times between 2022 and 2023 as a lever to tame rising consumer prices.cooled enough to allow the Fed to start moving interest rates in the other direction, with cuts already in September and November. Another rate cut could come when the Fed meets again next week.
“The Federal Reserve looks like they will continue to make the rate cuts throughout 2025 as inflation, broad consumer price inflation, comes down,” Yun said. “But due to the large budget deficit that the country is experiencing, so much government borrowing means less private capital, less money, less mortgage money out there for the housing market. And consequently, we will not see a return to 4% mortgage rates, 5% mortgage rates. 6% mortgage rate looks to be the new normal.