Reflecting on 2024, we are incredibly grateful for your trust and support. Referrals from neighbors, friends, and family made up about 90% of our business this past year—a testament to the relationships we’ve built and the value you place on our expertise. Thank you for letting us guide you through life’s big moves!
The 2025 real estate market is poised to offer new opportunities and challenges. Here’s a closer look at what we anticipate based on current trends, economic data, and our experience:
1. Moderating Interest Rates
Mortgage rates are expected to remain in the low 6% to high 5% range for much of 2025, offering buyers some relief compared to recent years. While these rates are still higher than pre-pandemic levels, 2024 demonstrated that buyers have adapted to this new norm. The Federal Reserve’s continued rate cuts should encourage more buyers to enter the market, creating opportunities for those planning their next move.
2. Rising Inventory
Nationwide housing inventory grew by about 5% in 2024, and we expect a similar increase in 2025. Single-family home contracts rose by 13% last year compared to 2023, signaling a shift toward a more balanced market. Although the housing market may still favor sellers, the gradual rise in inventory offers buyers more options and negotiating power. This trend will play a key role in shaping market dynamics throughout the year.
3. Steady Home Appreciation
Home prices are expected to continue appreciating in 2025, but at a more measured pace compared to the double-digit growth of recent years. Experts predict an increase of 3.5% to 4%, signaling a return to pre-pandemic norms. This shift represents a stabilizing market, one that’s healthier for buyers and sellers alike. For buyers, it’s a chance to enter the market without the pressure of skyrocketing prices, and for sellers, it ensures the value of their investments continues to grow steadily. This gradual appreciation reflects a housing market that’s finding its equilibrium after years of volatility.
4. Generational and Demographic Shifts
Generational shifts are reshaping housing trends in significant ways. First-time buyers, now older than ever with a median age of 38, face unique challenges. Many are relying on financial gifts, inheritances, or leveraging retirement savings to purchase their first homes. Higher prices and down payment requirements mean they’re saving longer or pooling resources with family to achieve homeownership.
Multigenerational living is also on the rise, now accounting for 17% of home purchases. Families are coming together under one roof to manage costs, care for aging relatives, or support young adults returning home. Meanwhile, single women are outpacing single men in home purchases, driven by greater financial independence and shifting societal norms. These demographic trends are not just shaping who is buying but also what buyers are seeking in a home—from flexible layouts for shared living to proximity to amenities that cater to a variety of lifestyles.
5. Post-Election Market Dynamics
Nationally, the post-election economy is expected to remain stable, with continued job growth. However, the DMV area may face unique challenges, including potential government and private sector job cuts. The incoming administration’s policies, such as potential tax cuts and deregulation, could boost business confidence and drive real estate activity nationwide. Locally, we’ll be watching closely to see how these policies impact demand and pricing.
The Bottom Line
2025 is shaping up to be a year of balance and moderation. Rising inventory and stable interest rates will provide buyers with more opportunities and leverage, while generational and demographic shifts will continue to shape market trends and preferences.
Whether you’re buying, selling, or staying informed, our team is here to help you navigate the market with confidence. Let us know how we can assist you in the year ahead. Here’s to an amazing 2025!
