In its newly updated forecast, Forbes provides a detailed outlook on where the U.S. housing market stands as of spring 2025. The report outlines both persistent challenges—such as high prices, tight inventory, and affordability concerns—and potential turning points that could create new opportunities for homebuyers and real estate professionals in the coming months. Read the full Forbes article →
Key Takeaways from the Forbes Report:
Home Prices Continue to Rise, But the Pace Is Slowing
U.S. home prices posted a 4.1% annual gain in January, according to the S&P CoreLogic Case-Shiller Index—up slightly from 3.9% in December. While this represents ongoing growth, experts say the pace is decelerating, particularly in areas with stronger construction activity like the South and West.
Importantly, many Midwestern markets remain relatively affordable due to their modest pandemic-era appreciation. Regional variations are creating localized affordability pockets, offering opportunity for strategic buyers and real estate professionals targeting those areas.
Affordability Is Still a Barrier for Many Buyers
Although mortgage rates have cooled slightly—averaging 6.76% in late February—the typical monthly payment for a new homeowner sits at $1,854, up from $1,841 just a year earlier. Over a 30-year loan, that modest $13 monthly difference equates to nearly $7,200 more in payments.
According to Attom’s Q1 2025 data, homes are considered unaffordable in 97% of U.S. counties, with the average homeowner now spending 32% of their income on housing—well above the 28% benchmark lenders prefer. In short, affordability remains a serious hurdle, especially for first-time buyers and lower-income households.
Existing and New Home Sales Show Early Signs of Life
There are encouraging signs of market movement. Existing-home sales jumped 4.2% in February as inventory rose 5.1% month-over-month and 17% year-over-year. However, activity still hovers near 30-year lows, according to NAR chief economist Lawrence Yun.
New home sales also ticked up in February, rising 1.8% month-over-month and 5.1% from a year earlier. But builders are cautious. Tariffs and rising construction costs threaten to slow momentum unless resale inventory continues growing—forcing builders to compete on pricing and incentives.
Pending home sales, a forward-looking indicator, rose 2% in February, hinting at a thaw—but annual pending sales remain down 3.6%, reflecting continued buyer hesitation.
What Would It Take for a True Recovery?
According to industry experts quoted in the article, two key shifts must happen for a housing recovery to take hold:
- A Significant Inventory Increase: More listings—either from new construction or from homeowners willing to sell—would ease price pressure and give buyers more negotiating power.
- Lower Mortgage Rates: Experts suggest a return to the 4–5% range would dramatically loosen the market. However, this is unlikely in the near term, especially given persistent inflation and the weight of national debt, which could keep rates elevated.
As Keith Gumbinger of HSH.com warns, if rates fall too quickly, a surge in demand could negate inventory gains and drive prices back up—a delicate balance the market will need to manage.
External Events Are Already Influencing Local Markets
Some markets are shifting faster due to external pressures. For example, wildfires in the Los Angeles metro have pushed up both rents and home prices. In Washington, D.C., job cuts and return-to-office mandates have increased listings, altering supply dynamics.
From the Loan Officer’s Perspective: Discipline Wins, Regardless of Market Conditions
It’s clear from this detailed Forbes report that the housing market remains complex. Rates are high. Prices are rising. Inventory is tight. And affordability remains a national concern.
But here’s the good news: your business doesn’t depend on perfect conditions. It depends on your consistency.
Whether the market heats up or cools down, your most important job is to stay connected to your referral partners, leads, and clients. Stick to the Mortgage Marketing Animals’ Daily Success Plan.
This is what separates top performers from those waiting for the “right” market. Because top producers know:
It’s not about the market. It’s about your actions. Let others obsess over headlines. You focus on your pipeline—and you’ll win no matter what the market does.