Zillow Predicts Existing-Home Sales Uptick in 2025

Seattle, WA, December 9, 2024-"Zillow has released its 2025 housing forecast calling for a pickup in activity over the next year,” reports Truist. 

“The company expects an increase in supply in the market, but still expects affordability issues to be at the forefront. Zillow estimates about 4.3 million existing home sales during the year, versus the four million the company projects for 2024 to finish. Additionally, Zillow sees home values up 2.6% y/y. Note that this home value growth is on the lower side of the historical norms and is similar to the growth seen in the latter part of 2024, as increased supply likely limit price gains. This year saw mortgage rates dip substantially towards the end of the summer, before increasing into the election. While Zillow does anticipate lower mortgage rates in 2025, the path that rates take to get here seems less clear. The company notes that the September rate decline was enough to bring the share of affordable existing home listings to the highest levels seen in almost two years. Existing home affordability in this case is measured by a median income household's ability to buy a home. Note that we have seen a trend recently of prospective buyers preferring smaller spaces, a sentiment which Zillow echoes in its outlook. The company notes that use of the term ‘cozy’ in listing descriptions is up about 35% from 2023.”