Market Trends for 2025

In its forecast for the upcoming year, Zillow anticipates an uptick in real estate activity, characterized by increased availability of homes for potential buyers. While the market is expected to become more favorable for buyers, fluctuations in mortgage rates could introduce a degree of uncertainty.

Alana Mann, President of The Statesman Group of Companies, weighed in on the predictions during a LiveNOW segment, emphasizing the implications for homebuyers as inventory expands amidst changing financial conditions.

State-by-State Housing Affordability Report

A recent report from Realtor.com evaluated housing affordability and construction efforts across the nation, assigning grades to each state based on their performance.

Top Performers in Affordability

• South Carolina: A – Recognized for its proactive construction policies that surpass housing demand.
• Iowa: A- – Noted for being one of the most affordable housing markets nationwide.
• Texas: A- – Experienced considerable building activity enhancing its housing availability.

States Facing Challenges

Conversely, the report highlighted states in the Northeast and West that struggled with affordability:

• California: F
• New York: F
• Massachusetts: F
• Rhode Island: F
• Hawaii: F

These states face high housing costs and regulatory barriers, such as stringent zoning laws and slow permitting processes, further complicating the housing landscape.

Expert Commentary on Housing Affordability

Damian Eales, CEO of Realtor.com, stated, “The only real solution to housing affordability is to build more homes.” He emphasized the need for states to advance their construction initiatives to combat the ongoing crisis of soaring housing costs and limited inventory.

A Closer Look at Recent Trends

According to another analysis by Redfin, 2024 saw minor improvements in home affordability. The share of income spent by the average American household on housing decreased slightly to 41.8%, from 42.2% in the previous year. Despite this small progress, it remains significantly higher than the desired threshold of 30% that characterized the 2010s.