Is the Housing Market Slowing Down in 2025?

By Travis Anderson

In 2011, Travis started his career over and began building his own team; a team that has a different look and feel than most teams in the industry; one built SOLELY for the betterment of the client.

Are you thinking about buying or selling a home this year? You’re not alone. The real estate market is changing, and it’s important to know what’s going on before you make any moves. In this update, I’ll break down the key trends we saw in 2024 and what we can expect in 2025.

2024 market highlights: prices, sales, and inventory. In 2024, the median home price was $380,000. That’s up by 3.3% from the previous year. While that sounds like good news for sellers, we saw a dip in the number of homes sold. There were 45,000 closed sales, which is a slight increase of 1.8% from 2023 but a sharp drop of 24% compared to pre-pandemic levels.

What does this mean for you? Fewer homes were sold in 2024 compared to the past, and inventory was more limited. With 64,000 new listings in the Twin Cities, only about 70% of those homes sold. That’s down from 78% in 2019, showing that it’s getting harder to sell homes as quickly as before.

The rise of new construction. A major trend we saw in 2024 was the increase in new construction homes. New listings made up 21% of the market, compared to just 13% back in 2019. That’s a big jump! With 13,000 new builds on the market, homebuyers had more options to choose from, especially if they wanted something new.

What’s next in 2025: fewer showings, more contingencies. Looking ahead to 2025, the real estate market is continuing to shift. One major change we’re seeing is a drop in the number of showings per listing. A few years ago, listings would often get 15-25 showings before selling. Now, we’re seeing only 8-15 showings on average. Fewer people are making it to open houses and tours, which could mean it’s getting harder to stand out in the market.

Another change? Home sale contingencies are back. Many sellers who are also buying a home are now including contingencies in their offers. That means they’ll only buy a new home if they sell their current one first. This practice disappeared when the market was hot, but it’s making a comeback now.

Interest rates and seasonality in 2025. Mortgage rates in 2024 averaged around 6.7%. Experts, like Fannie Mae, predict rates will stay close to 6.5% in 2025. While that’s a little higher than what we saw in recent years, it’s still relatively stable. For buyers, this means planning your budget around a steady interest rate is important.

Seasonality is also in full swing. Every January, I see more buyers entering the market, and this year is no different. With more people looking to buy, it’s a great time for sellers to make a move

The market may be different than before, but with the right strategy, you can still make a smart move. If you’re thinking about buying or selling, you can call or text me at (651) 485-6383. I’ll guide you through these changes to make sure you’re ready for what’s coming next for the housing market.