Last Updated on January 3, 2025 by Luke Feldbrugge
Welcome to the Housing Market Trends January 2025 monthly update from Homes for Heroes. This report focuses on the residential real estate housing market. We listen to the experts and boil down what they have to say to assist you, our heroes, with decision making regarding buying a home, selling your home, or refinancing your mortgage.
Housing Market Trends January Key Takeaways
The housing market is ever-evolving. Economic factors, government policies, interest rates, and even socio-cultural shifts can play a role in how the market behaves. That said, here are some housing market trends for January to help determine what’s best for you as you consider your housing situation:
- Mortgage Rate Trends – Mortgage rates started 2025 slightly higher, with the 30-year fixed rate at 6.91%, but experts project a gradual decline throughout the year, potentially reaching low-6% by year-end.
- Home Inventory Trends – Inventory decreased in November 2024, likely due to a 6% increase in YOY sales in November.
- Home Pricing Trends – Home prices continued to rise, with a 4.7% increase in November 2024 and forecasts predicting a 3.0% average increase for 2025.
- Save with Homes for Heroes – The Homes for Heroes program provides significant savings to community heroes, with an average savings of $3,000 after buying, selling, or refinancing a home with their local specialists. Sign up today to learn more and a member of the Homes for Heroes team will contact you.
Housing Market Trends January 2025 in Detail
Mortgage Rate Trends
Freddie Mac’s Primary Mortgage Market Survey weekly trend line graph above shows interest rates over the past twelve months for both the 30-year and 15-year fixed rate mortgage, and since the most recent Fed quarter-point rate reduction on November 7th, mortgage rates for the 30-year fixed was at 6.79%. It eventually came down to 6.60% two weeks prior to Christmas, only to pop back up and open the new year on January 2, 2025 at 6.91%. The 15-year rate also started the new year slightly higher, moving from 6.00% on November 7th, to 6.13% on January 2, 2025.
The increase in mortgage interest rates runs counter to what potential home buyers were hoping to see, following the Fed’s rate reductions in September and November. However, many industry experts have said most of the mortgage rate reduction happened pre-September’s Fed announcement in anticipation of a rate reduction happening.
The mortgage interest rate trend is projected to decline each quarter for the next 12 months throughout 2025, but it is anticipated to be a much more gradual decline than originally anticipated.
As of December 4, 2024 these three industry leaders project that we will reach low-6 percent mortgage rates on a 30-year fixed rate mortgage by the end of 2025. Is there a chance the market will get under 6 percent? Sure there’s a chance, but it’s not projected by these industry leaders.
The table above shows an average mortgage rate projection for Q4 2024 of 6.67%. As of December 31, per Optimal Blue’s daily mortgage rate estimates, the 30-year conforming mortgage rate closed out 2024 at 6.86%. Coming in higher than anticipated by these industry leaders in early December 2024.
That said, the mortgage interest rate trend is projected to decline each quarter for the next 12 months throughout 2025. However, it will be more of a gradual decline throughout the year.
If you are thinking about getting into the housing market, remember to consider working with Homes for Heroes real estate and mortgage specialists to help you through the process. We help local heroes (firefighters, EMS, law enforcement, military and veterans, healthcare professionals, and teachers) save significant money when they close on a home with our specialists. On average, one of our heroes can save $3,000 if they buy a home, and $6,000 if you buy AND sell a home.
Sign up today to speak with a member of the Homes for Heroes team. They will reach out to answer your questions, and to find out how we can best serve you.
Home Inventory Trends
The National Association of Realtors (NAR) reported the inventory of unsold existing homes decreased 2.9% in November 2024 versus the previous month of October 2024.
However, that is due in part to sales increasing 6.1% from one year ago. This increase is the largest year-over-year gain since June 2021, as buyers snatched up more houses than we’ve witnessed in November over the past few years. Maybe indicating some buyers are tired of sitting on the fence and waiting for inventory to loosen, prices to drop, or interest rates to get lower.
Even though November’s unsold existing inventory decreased, if we look at the count of active listings in the month of October from 2021-2024, we see a good trend of steady inventory increases year over year, even though it was virtually flat in 2023.
2025 Home Pricing Trends
Home prices continue to appreciate. The bar chart above reflects 2025 home price forecasts from sixteen different industry leaders as of 12/4/2024, forecasting an average home price increase of 3.0% in 2025.
The National Association of Realtors (NAR) reported that national home prices increased 4.7% in November 2024, versus YOY November 2023. And, that marks the 17th consecutive month of year-over-year national median existing home sales price gains.
This is great news for homeowners worried about loss of recent equity gains for their current home.
It’s also good news for would-be home sellers who want to capitalize on the recent home price increases to leverage that gained equity for other financial priorities.
However, this is not great news for home buyers who are still struggling to find affordable housing options in today’s market.
That said, it is good to know that leading market experts are expecting the rate of home price appreciation to slow a bit throughout 2025. But, the market’s low inventory issue is still causing prices to rise.
If you’re deciding whether to enter the market to purchase a home and would like to better understand your current local housing market trends, sign up to speak with a member of the Homes for Heroes team. They will answer your questions.
Receive an Average of $3,000 from Homes for Heroes
Homes for Heroes assists firefighters, EMS, law enforcement, active military and veterans, healthcare professionals and teachers; with buying, selling and refinancing their home or mortgage. But if you work with our local real estate and mortgage specialists to buy, sell or refinance; they also provide significant savings after you close on a home or mortgage.
We refer to these savings as Hero Rewards, and the average amount received by a hero who closes on a home with our local specialists is $3,000, or $6,000 if you buy and sell!
Simply sign up to speak with a member of the Homes for Heroes team. There’s no obligation. After you sign up, a member of our team will contact you to ask a few questions and help you determine the appropriate next steps for you.
Our local real estate and/or mortgage specialists in your area are ready and willing to assist you through every step of the process, and save you money when it’s all done.
It is how Homes for Heroes and our local specialists thank community heroes like you for your dedication and valuable service.
