Housing Market Poised for Gradual Recovery
U.S. housing shows early signs of stabilization as affordability may improve slightly in 2025, an economist said. The market is gradually balancing.
NEW YORK – The U.S. housing market is showing early signs of stabilization following a steep post-pandemic slowdown, with conditions beginning to shift.
First American Deputy Chief Economist Odeta Kushi projects affordability will improve slightly in 2025 compared with late 2024, though it will remain over 30% lower than in early 2022. Even modest mortgage rate changes could have outsized effects, offering buyers potential relief sooner than expected.
Regional differences are emerging, with Northeastern and Midwestern markets poised for the strongest price growth unless supply expands. Existing-home sales have already passed the cyclical low point but remain muted, constrained by ultra-low locked-in mortgage rates and a stagnant labor market.
In the new-home sector, sales could finish 2025 below 2024 levels due to affordability pressures, tariff uncertainty and competition from resale inventory.
While lifestyle changes will sustain some activity, Kushi says the market has “found the floor” and is headed for gradual balance.
“The worst of the adjustment appears to be behind us,” and while “2025 may not end in a boom, it won’t be a bust either. It’s a slow, steady march toward balance,” Kushi said, as reported in MPA news.
Source: MPA news (08/12/25) Cueto, Jonalyn
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