Zillow predicts more buyers will come out ahead in a bumpy 2025
Zillow forecasts a more active housing market in 2025, predicting 2.6% home value growth and 4.3 million existing home sales. While mortgage rates are expected to ease, their unpredictability will continue to impact buyer decisions. The market is projected to become more buyer-friendly, particularly in the Southwest, with increased inventory providing more negotiating power. Home buyers are embracing smaller, 'cozier' spaces as an affordable alternative. In the rental market, the historic multifamily construction boom is expected to slow down in the second half of 2025, potentially reducing rent concessions. Property managers are adapting to an older renter demographic (median age 42) with increasing pet ownership (58% of renters).
Zillow prevede un mercato immobiliare più attivo nel 2025, con una crescita del valore delle case del 2,6% e 4,3 milioni di vendite di case esistenti. Sebbene si preveda un allentamento dei tassi ipotecari, la loro imprevedibilità continuerà a influenzare le decisioni degli acquirenti. Si prevede che il mercato diventi più favorevole agli acquirenti, in particolare nel Sud-ovest, con un aumento dell'inventario che offrirà maggiori possibilità di negoziazione. I compratori di case stanno abbracciando spazi più piccoli e 'più accoglienti' come alternativa economica. Nel mercato degli affitti, il boom storico della costruzione multifamiliare è previsto rallentare nella seconda metà del 2025, potenzialmente riducendo le concessioni sugli affitti. I gestori immobiliari si stanno adattando a una demografia di inquilini più anziana (età mediana di 42 anni) con un crescente possesso di animali domestici (58% degli inquilini).
Zillow pronostica un mercado de vivienda más activo en 2025, con un crecimiento del valor de las casas del 2,6% y 4,3 millones de ventas de casas existentes. Si bien se espera que los tipos de interés hipotecarios disminuyan, su imprevisibilidad seguirá impactando las decisiones de los compradores. Se prevé que el mercado se vuelva más favorable para los compradores, especialmente en el Suroeste, con un aumento del inventario que ofrecerá mayor poder de negociación. Los compradores de casas están optando por espacios más pequeños y 'acogedores' como una alternativa asequible. En el mercado de alquileres, se espera que el histórico auge de la construcción multifamiliar se desacelere en la segunda mitad de 2025, lo que podría reducir las concesiones de alquiler. Los administradores de propiedades se están adaptando a una demografía de inquilinos más anciana (edad media de 42 años) con un aumento en la tenencia de mascotas (58% de los inquilinos).
Zillow는 2025년에 더 활성화된 주택 시장을 예측하며, 주택 가치가 2.6% 증가하고 430만 채의 기존 주택이 판매될 것으로 예상하고 있습니다. 주택담보대출 금리는 완화될 것으로 보이나, 그 예측 불가능성은 여전히 구매자 결정에 영향을 미칠 것입니다. 시장은 특히 남서부 지역에서 구매자 친화적으로 변할 것으로 예상되며, 증가하는 재고는 더 많은 협상력을 제공할 것입니다. 주택 구매자들은 저렴한 대안으로 더 작고 '아늑한' 공간을 선호하고 있습니다. 임대 시장에서는 역사적인 다가구 건설 붐이 2025년 하반기에 둔화될 것으로 예상되어, 임대 양보가 줄어들 수 있습니다. 자산 관리자는 평균 연령이 42세인 노인 임차인 인구 통계에 맞추어 점점 더 많은 반려동물 소유자를 수용하고 있습니다(임차인의 58%).
Zillow prévoit un marché immobilier plus actif en 2025, avec une croissance de la valeur des maisons de 2,6 % et 4,3 millions de ventes de maisons existantes. Bien que les taux hypothécaires devraient diminuer, leur imprévisibilité continuera d'influencer les décisions des acheteurs. Le marché est projeté pour devenir plus favorable aux acheteurs, en particulier dans le Sud-Ouest, avec une augmentation des stocks offrant plus de pouvoir de négociation. Les acheteurs de maisons adoptent des espaces plus petits, 'plus confortables', comme alternative abordable. Sur le marché locatif, le boom historique de la construction multifamiliale devrait ralentir dans la seconde moitié de 2025, ce qui pourrait réduire les concessions de loyer. Les gestionnaires de biens s'adaptent à une démographie de locataires plus âgés (âge médian de 42 ans) avec une augmentation de la possession d'animaux de compagnie (58 % des locataires).
Zillow prognostiziert einen aktivieren Wohnungsmarkt im Jahr 2025, mit einem Wachstum des Hauswerts von 2,6 % und 4,3 Millionen Verkäufen bestehender Häuser. Während die Hypothekenzinsen voraussichtlich sinken werden, wird ihre Unvorhersehbarkeit weiterhin die Entscheidungen der Käufer beeinflussen. Der Markt wird voraussichtlich käuferfreundlicher, insbesondere im Südwesten, mit einem erhöhten Angebot, das mehr Verhandlungsmacht bietet. Hauseigentümer wenden sich kleineren, 'gemütlicheren' Räumen als erschwingliche Alternative zu. Auf dem Mietmarkt wird erwartet, dass der historische Boom im mehrfamilienhaus-Bau in der zweiten Hälfte des Jahres 2025 verlangsamt wird, was möglicherweise zu einer Verringerung der Mietvergünstigungen führen könnte. Immobilienverwalter passen sich einer älteren Mieterschaft (mittleres Alter 42 Jahre) an, die zunehmend Haustiere besitzt (58 % der Mieter).
- Forecasted increase in existing home sales to 4.3 million in 2025 from 4.1 million in 2023
- Expected expansion of buyers markets providing better negotiating power
- Predicted increase in available housing inventory
- Modest 2.6% home value growth forecast, indicating slow market appreciation
- Continued mortgage rate volatility creating market uncertainty
- Expected reduction in rent concessions in second half of 2025
Insights
The 2025 housing market forecast reveals several key trends that could impact investors in real estate and related sectors. The projected
Particularly noteworthy is the expansion of buyers' markets into the Southwest region, which could pressure homebuilders and real estate companies operating in these areas. For Zillow (ZG), this market evolution presents both opportunities and challenges - while their tools like BuyAbility and Showcase may see increased adoption in a more buyer-friendly market, the company's revenue could face pressure if transaction volumes remain subdued.
The shift in rental market dynamics, with the multifamily construction boom expected to slow in late 2025, could benefit property management companies and REITs focused on the multifamily sector. The increasing importance of pet-friendly policies and changing renter demographics represent structural shifts that investors should monitor.
For Zillow Group (ZG), this forecast has mixed implications for their business model and revenue streams. While increased market activity and sales volume could boost transaction-related revenues, the modest home value appreciation of
The company's strategic positioning with digital tools like BuyAbility and Showcase aligns well with the predicted market evolution, potentially driving higher engagement and monetization opportunities. However, the volatile mortgage rate environment could create unpredictable patterns in user engagement and transaction volumes.
The shift toward a buyers' market in more regions could increase the importance of Zillow's seller-focused products and services, creating new revenue opportunities. Investors should watch for the company's ability to monetize these changing market dynamics while managing operational costs in a potentially challenging environment.
Unpredictable mortgage rates will play a big role in shaping next year's housing market
- The housing market is expected to slowly become unstuck, but mortgage rates could be a spoilsport, with their unpredictability expected to make planning for a home purchase a challenge.
- Buyers markets will spread to the Southwest unless rates fall dramatically.
- As the biggest multifamily construction boom in 50 years fizzles out, Zillow predicts fewer rent concessions in the second half of 2025.
"Buying a home in 2024 was surprisingly competitive given how high the affordability hurdle became. More inventory should shake loose in 2025, giving buyers a bit more room to breathe," said Skylar Olsen, Zillow chief economist. "Americans are adapting to sky-high costs by embracing coziness, a term that for so long has been a thinly veiled critique in real estate lingo. Many are also viewing renting as a longer-term lifestyle. A construction boom has eased pressure on rent prices, putting rent affordability on track to improve next year — that is, as long as wages continue to grow."
Housing market activity will pick up
Expect to see more sales and only modest home value growth in 2025 as the market slowly becomes unstuck.
Zillow forecasts
While affordability challenges will remain, buyers should expect more homes on the market, meaning more time to consider their options and more leverage in negotiations.
Mortgage rates will fall (then rise, then fall again)
Signs point to mortgage rates easing in 0225, but as we saw in 2024, mortgage rates rarely follow the expected path. What is more certain is that buyers should expect plenty of ups and downs throughout the year.
Mortgage rates fell in September, briefly bringing the share of affordable listings to a 19-month high. They have since climbed back to nearly
Home buyers should stay ready to move forward when the time is right. Zillow Home Loans' BuyAbilitySM tool can help by giving buyers a personalized estimate of the home price and monthly payment that fits within their budget at any given moment (based on current mortgage rates), and showing them homes they can afford.
Buyers markets will spread to the Southwest
Currently, 13 major metro areas are buyers markets — where buyers have the upper hand in negotiations, according to Zillow's market heat index — with most of those in the Southeast. Zillow predicts buyers markets will spread to the Southwest in 2025 as inventory continues to come unstuck in relatively affordable markets.
Sellers will feel the heat of competition as buyers will have more homes to choose from. It will be more important than in recent years to work with a great agent to help price and market a home listing well. Tools like Zillow Showcase, an immersive listing experience, can help drive more page views, saves and shares from buyers searching for homes with those attributes, compared to similar neighboring non-Showcase listings on Zillow.2
If mortgage rates fall more than expected, that dims the prospect that buyers markets will spread west. It is anticipated that a significant mortgage rate dip would bring more buyers than sellers back to the market, increasing competition and tilting negotiating power in favor of sellers.
Americans embrace small-home living
The pandemic-era need for more and more space is over. Home buyers will increasingly lean into smaller homes as a more sustainable, affordable and desirable way to live.
The term "cozy" is appearing in more listing descriptions —
Last call for rent concessions
Apartment renters enjoyed a relatively friendly market this year, at least compared to the record rent growth seen in 2022. Rent growth has held steady at a reasonable pace, and the share of rental listings on Zillow offering a concession — such as free weeks of rent or free parking — is at a record high. Zillow expects renters will not have as much opportunity to negotiate for that free month of rent by the end of next year.
The multifamily-construction boom is the primary reason for the rise in concessions. More multifamily units are hitting the market than at any time in the past 50 years, pushing property managers to compete for renters. Those fireworks are predicted to fizzle in 2025, especially in the second half of the year.
Pet-friendliness will become nonnegotiable for property managers
Renters are getting older, and they are not putting off "adulting" milestones such as moving in together or getting a pet before they buy a home. The median age of a renter has risen to 42, and they are settling into the renter lifestyle — fewer renters considered buying this year, which is understandable given conditions that make renting the more affordable option in many markets.
With
About Zillow Group
Zillow Group, Inc. (Nasdaq: Z and ZG) is reimagining real estate to make home a reality for more and more people. As the most visited real estate website in
Zillow Group's affiliates, subsidiaries and brands include Zillow®, Zillow Premier Agent®, Zillow Home Loans℠, Zillow Rentals®, Trulia®, Out East®, StreetEasy®, HotPads®, ShowingTime+℠, Spruce®, and Follow Up Boss®.
All marks herein are owned by MFTB Holdco, Inc., a Zillow affiliate. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org). © 2024 MFTB Holdco, Inc., a Zillow affiliate.
1 Source: Freddie Mac Primary Mortgage Market Survey, November 21, 2024 |
2 Claim is based on the data available here: https://showingtimeplus.com/showcase-facts |
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SOURCE Zillow
FAQ
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