Andy Tuttle here with the Tuttle Group, bringing you the 2025 housing market update. Let’s break it all down and make sense of what’s happening in the world of interest rates, home buying, and how it all affects you.
Through the first month of 2025, interest rates have gone up and down and are now right back where they started the year. To start off this week, stocks are struggling, especially tech stocks, while mortgage bonds are doing well. Why? Investors are pulling money out of riskier areas like stocks and putting it into safer options like bonds. This shift is helping mortgage rates in the short term!
The latest stir comes from a Chinese AI company, DeepSeek, which is making waves with a cheaper and more efficient AI model. This news hit big tech stocks like Nvidia, and when stocks fall, bonds often benefit.
We’re seeing a boost in new home sales – up almost 4% last month! That’s great news for the housing market. The median home price is around $427,000, but keep in mind this reflects more high-end home sales, so it’s not the whole picture.
Inventory is tight. While it seems like there’s an 8.5-month supply of new homes, most aren’t finished yet. If we only count move-in-ready homes, it’s closer to a two-month supply, which is much leaner.
Existing home sales also surprised us, rising over 2% in December – the strongest in nearly a year! Inventory is still below normal levels, keeping prices steady. The median home price is about $404,000, up 6% from last year.
Buyers are staying active despite higher rates, and nearly a third of sales are first-time homebuyers. Investors and cash buyers are also stepping in, which adds more competition.
So What’s Next for Rates? Rental prices are cooling off, which could help bring inflation down. That’s important because lower inflation usually leads to lower mortgage rates. Later this week, we’ll get some big economic reports, including inflation data that could signal where rates are headed.
Bottom Line: The housing market is holding strong, and there are signs rates may improve this year. If you’re in the market for a home, this could be a great time to start preparing. And for more housing market updates like this one, follow us on our YouTube channel.