The wild momentum swings we've seen in the housing market during and since the pandemic are expected to calm down in the new year. That's the projection from online real estate brokerage firm Redfin, which is projecting a 4 percent increase in the median home price during 2025, with total home sales to rise between 2% and 9%. Those numbers are more modest compared to the rapid acceleration at the onset of the pandemic, followed by the slowdown of the last few years fueled by inflation and high interest rates. "There seems to be a consensus (in the industry) that there's a normalization, instead of this crazy market that we've seen the last four years," says Cliff Freeman, Texas-based realtor. "So I think that 4 percent number is probably pretty reasonable."
While Redfin's projections are for the nationwide market, Freeman notes that Texas usually bucks those trends, and could do so again next year. "We've got a lot of inventory here (in Texas)," he tells KTRH. "And due to increases in other costs, like insurance and so forth, we could see some moderation in sales here, which could potentially put a little bit of a slowdown on price acceleration in our market."
The biggest wild card factor is interest rates, which rose to historic highs in recent years before the Fed began cutting again this fall. Those high interest rates have kept many homeowners reluctant to sell, which has contributed to the market slowdown. "We're gonna sell more homes this year, but it's not gonna be a blowout by any stretch," says Freeman. "And I think interest rates are really gonna be the lid on the container that keep things from repeating again."