Mortgage rates may remain elevated in 2025 but the latest report from real estate broker Redfin hints at a slight improvement in the housing market for buyers in the new year. After years of declining inventory, there may be more homes to choose from.
The report shows active home listings climbed 12% year-over-year during the four weeks ending December 22, 2024. It’s the smallest increase since March but it shows inventory levels are moving in a positive direction. Redfin says seasonal effects hearing into the holidays may have subdued new listings.
Despite the holiday lull, the housing market continues to show resilience. The median sale price of homes rose by 6% to $383,725, while the median asking price increased by 5% to $376,000. That’s better news for sellers than buyers.
Unfortunately, the median monthly mortgage payment also rose, reaching $2,519 at a 6.85% mortgage rate, up 7.1% from the previous year.
The Redfin Homebuyer Demand Index, which measures tours and other homebuying services, remained stable from the previous month but showed a 4% increase year-over-year. However, touring activity has decreased by 52.9% from the start of 2024, a slight improvement from last year's 57.7% drop.
In terms of regional performance, Philadelphia led the nation with a 17.1% increase in median sale prices, followed by Milwaukee and Cleveland. Conversely, San Antonio experienced the most significant decline in pending sales, dropping by 17.4%, with Orlando and Houston also seeing notable decreases.
Where listings are increasing
New listings remained flat nationally, but some metros like Oakland and Las Vegas saw increases of 9% and 8.9%, respectively. Meanwhile, San Antonio and Nassau County, N.Y., faced the steepest declines in new listings.
As the market navigates through the holiday season, Redfin said it anticipates a return to more predictable market after the holidays. For now, the data suggest a balanced market with a months-of-supply figure at four, indicating neither a strong buyer's nor seller's market.
Overall, while the housing market shows signs of seasonal slowdown, the underlying demand and price growth indicate continued strength heading into the new year.