MARKET OUTLOOK
As we step into 2025, mortgage rates remain a hot topic. Over a year has passed since the anticipated drop in rates, and while they dipped slightly earlier this year, they’re back to hovering around 7% as I write this. Factors like a strong economy, low unemployment, and uncertainty surrounding the new administration’s policies continue to fuel inflation concerns. Compounding this issue is the persistent lack of housing inventory.
While inventory has increased slightly, it’s still insufficient to curb the rise in home prices. The combination of elevated home prices and higher mortgage rates adds further pressure to inflation.
Looking ahead, rate predictions for 2025 vary widely, ranging from the low-to-mid 5% range to as high as 7%. Despite this uncertainty, we remain optimistic about potential rate declines and an increase in housing inventory, which could stabilize the market.
The Good and the Bad
Home prices continue to appreciate at a historically elevated pace, offering both opportunities and challenges for buyers and sellers.
While many homeowners currently enjoy rates lower than today’s levels, some may be grappling with consumer debt accumulated in recent years. With credit card rates climbing, tapping into the equity gained during the recent housing boom could be a smart move to consolidate and pay off high-interest debt.
As we embark on 2025, don’t forget to set your goals and objectives for the year ahead.
Cheers!
Karen
