Housing executives express mixed views on affordability, home sales expectations

Mortgage rate pessimism

Out of the surveyed pool, only 52 respondents expected to see sub-6% mortgage rates by the end of 2025. Another 79 respondents played it safe and estimated that the end of 2026 was a more realistic timeline.

“Both Barry [Habib] and I mentioned that we saw 6% as a potential catalyst point for more home sales transactions,” said Mike Simonsen, the founder and president of Altos Research.

“I cited evidence from September 2024 as the reason. Barry constructed a scenario with inflation and the bond market that would allow rates under 6% in 2025. So, we wanted to know when the audience expects to see sub-6% again. Most were not expecting it in 2025. Some were very pessimistic and think lower rates are still several years off.”

Five respondents said sub-6% rates wouldn’t be seen until 2028 or later Simonsen said this indicates that people are expecting elevated bond market rates through next year.

Last year saw about 4 million existing-home sales, which marked the fewest transactions in nearly three decades. The majority of the survey respondents, when asked about home sale expectations, predicted a range of 4 million to 4.2 million for this year.

“The executives in this room are responsible for the sale or the loan on a big share of those transactions,” Simonsen said. “They have visibility into how their businesses are performing in Q1 and what their pipelines look like for home sales in Q2. So, asking for their view on home sales for the year is good business planning, probably combined with a tinge of hopeful optimism.

“Most of the respondents remain optimistic for some growth in home sales in 2025, projecting 4 to 4.2 million sales,” he added. “That would be less than 5% market growth for the year. However, a significant portion (22%) are bearish for 2025, expecting home sales to decline further from the already very low numbers. For those folks, they anticipate the worst is not yet past.”

HousingWire’s own forecast calls for 4.2 million home sales in 2025.

Another survey question asked about expectations for home-price appreciation, given that 2024 finished with growth of 4%. The most common forecast was for appreciation of 5% or less in 2025.

“Even though home sales were fewer in 2024, home prices finished the year up about 4%. Almost all of the respondents expect home prices to perform less well this year, with 22% of the executives (30 respondents) expecting home prices nationally to finish 2025 negative,” Simonsen said.

Meanwhile, only 5% of respondents thought home prices would climb by 5% or more.

“These are people who assume that economic changes will drive interest rates lower, faster, and that lower interest rates will spur homebuyer demand that has been waiting on the sidelines. We saw some evidence of price resilience in the fall 2024 when mortgage rates briefly approached 6%,” Simonsen said.

“For the 5% of people who think home prices could fall nationally by 5% or more in 2025, their hypotheses tend to be that interest rates are going higher, not lower, given their interpretation of macroeconomic trends.”

Hot topics: affordability and Trump

With most people in the industry focused on finding ways to make homeownership more achievable, affordability was a key survey topic. The majority of respondents (70 in total) expect affordability to be the same in five years, whereas 40 think affordability will improve and 36 think it will wane.

“Those that think we have a shot at improving affordability tend to believe that removing regulatory burdens for construction and cheaper interest rates will help supply and payments affordability in the coming years,” Simonsen said. “Those more pessimistic on affordability see the practical and societal hurdles to housing supply and pricing dynamics as more intractable.”

Amid recent buzz from the Consumer Financial Protection Bureau and U.S. Department of Housing and Urban Development as the Trump administration crusades against government waste, the audience was neutral in their opinions that changes at the agencies will impact their businesses.

“Our audience was generally optimistic about recent changes in the regulatory bodies that govern the housing market, with 38% seeing the changes positively impact their business,” Simonsen said.

Similarly, most executives said their businesses have not been impacted by the landmark National Association of Realtors‘ commission lawsuit settlement agreement, which was the survey’s last question.

Simonsen noted that some real estate brokers reported weakening of commission rates, but just as many respondents cited positive changes to their businesses.