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Promising Signs Emerge for Homebuying Season

  • Mortgage Returns
  • Apr 9
  • 1 min read
Market Perspective: Fast Facts About the Housing Market.
Improved inventory in 2024 helped narrow the supply gap. 1 • Construction of new homes outpaced household formations. o First time in 8 years • Single-home completions reached highest level since 2007. And more newly built homes are coming.2 • New homes for sale by stage of construction:* • 23.8% Completed • 20.4% Not Started • 55.8% Under Construction *As of February 2025 But recent tariffs could slow homebuilding efforts, as higher material costs will increase prices for homebuyers. February brought increased buying and selling activity. • New-Home Sales: ↑ 1.8% MoM | ↑ 5.1% YoY3 • Existing-Home Sales: ↑ 4.2% MoM | ↓ 1.2% YoY4 • Pending Sales: ↑ 2% MoM5 • Purchase Applications Index: ↑ 2% WoW | ↑ 9% YoY*6 o Highest level since end of January *Week ending 03/28/2025 “Overall purchase activity has shown year-over-year growth for more than two months as the inventory of existing homes for sale continues to increase, a positive development for the housing market despite the uncertain near-term outlook.” — Joel Kan, Chief Economist for MBA6 Both NAR® and Fannie Mae see a stronger 2025 outlook. NAR Forecast5 2025 2026 Average 30-Year Fixed Mortgage Rate 6.4% 6.1% Existing-Home Sales ↑ 6% ↑ 11% New-Home Sales ↑ 10% ↑ 5% Fannie Mae Forecast7 2025 2026 Average 30-Year Fixed Mortgage Rate 6.5% 6.2% Existing-Home Sales ↑ 4.4% ↑ 7.1% New-Home Sales ↑ 2.8% ↑ 4.9% Mortgage rates are trending lower, improving affordability.8 • Average 30-year fixed rate: 6.64%* o Down from 7.04% in mid-January *Week ending 04/03/2025

Sources:

  1. Realtor.com, “Housing Supply Gap Reaches Nearly 4 Million in 2024,” March 10, 2025.
  2. Realtor.com, February 2025 New-Home Sales.
  3. U.S. Census Bureau, HUD, Monthly New Residential Sales, February 2025.
  4. National Association of Realtors (NAR)®, Existing-Home Sales, February 2025.
  5. NAR®, Pending Home Sales, February 2025.
  6. Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey, April 2, 2025.
  7. Fannie Mae Housing Forecast, March 2025.
  8. Freddie Mac Primary Mortgage Market Survey®, April 3, 2025.

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