Real Estate Update: NAR economists cautiously optimistic for 2025

The National Association of Realtors (NAR) hosted its annual Forecast Summit, with NAR Chief Economist Lawrence Yun heading the online panel and presentation.

The first point to take from the discussion is that experts believe mortgage rates will hover around the same level as they are currently throughout 2025.

Yun cited the national deficit as a factor limiting long-term reduction of interest rates, even with future Federal Reserve cuts.

“Mortgage rates may not move all that much unless somehow we can address the national debt in the longer-term perspective,” Yun said. “We do not have to fix any national deficit or debt situation in a single year; there just needs to be a credible plan to bring it down over the future years and then maybe we can get the mortgage rate down more meaningfully.”

Yun appeared optimistic about the annual number of existing home sales for 2025, citing factors such as inventory growth of available starter homes, more first-time buyers coming of age, and millennials making a slightly higher average income.

However, this view was not universal, as Realtor.com Chief Economist Danielle Hale is forecasting a much more modest 1.5% year-over-year increase from 2024.

The construction side of the real estate market is uncertain about the potential impact of policies from the incoming Trump administration, particularly regarding the effects of tariffs on inflation and the proposed mass deportation of immigrants. 

However, these concerns are at least somewhat mitigated by the potential for tax cuts and fewer regulations on the construction industry. 

Only time will tell what 2025 has in store for the construction industry.

Here in Huntsville, the Huntsville Area Association of Realtors (HAAR) has released its weekly report for the last week of November. The report showed that pending sales in the Huntsville/Madison County region were up for both single-family units and townhouse/condo units, with single-family units up by 26%, and sales of townhouse units up by 120%.

New listings of single-family units dipped slightly, with an 8.4% decrease, while new listings of townhouse units were up 171.4%.

Inventory of both single-family and townhouse units have continued their steady increase. The report shows an inventory increase of 22.9% for single-family units, and a 92.8% increase in the inventory of townhouse units.

As always, the Huntsville Business Journal will continue to monitor developments in the real estate market, both nationally and here at home.