January 2025 Housing Market Update

The latest report from the National Association of REALTORS® (NAR) reveals a mixed start to 2025 for the housing market. Existing-home sales declined 4.9% from December, settling at a seasonally adjusted annual rate of 4.08 million in January. Despite the monthly decline, sales saw a 2% increase compared to January 2024.

One of the biggest hurdles for buyers remains housing affordability. Mortgage rates have hovered around 6.85%, while home prices continue to climb. The median existing-home price rose to $396,900 in January, marking a 4.8% year-over-year increase.

Key Market Highlights:

Inventory Growth: Housing inventory increased 3.5% from December and 16.8% from last year, reaching 1.18 million units.
Days on Market: Homes stayed on the market for an average of 41 days in January, up from 35 days in December.
First-Time Buyers: Only 28% of buyers were purchasing their first home, down from 31% in December and consistent with last year.
Cash Buyers: Cash transactions accounted for 29% of all sales, showing continued investor activity in the market.

Regional Breakdown:

Northeast: Sales declined 5.7% from December but increased 4.2% year-over-year. Median price: $475,400 (+9.5%).
Midwest: Sales remained unchanged month-over-month but rose 5.3% from January 2024. Median price: $290,400 (+7.2%).
South: Sales fell 6.2% from December and remained flat year-over-year. Median price: $356,300 (+3.5%).
West: Sales dropped 7.4% from December but increased 1.4% year-over-year. Median price: $614,200 (+7.4%).

What This Means for Buyers & Sellers: Buyers may see more opportunities with rising inventory, but affordability remains a challenge due to steady mortgage rates and increasing home prices. Sellers continue to benefit from strong demand, though proper pricing will be key as market conditions shift.

Whether you're looking to buy or sell, staying informed is essential.

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