A New Year Begins

The Fed kept its benchmark rate unchanged; interest rates ticked down below 7%; stock markets remain high (though sometimes volatile); consumer confidence turned a bit unsure about the future. A terrible climate-related disaster rocked the state, with human and financial costs and consequences that will take years to quantify. And for better or worse - you can make your own evaluation - national and international politics have been thoroughly destabilized by new and constantly changing developments, with yet uncertain effects on society, the economy and housing markets.

But in local real estate, 2025 began with the usual new year rebound: The numbers of new listings and of listings going into contract have bounced back from their annual low counts in December, and both are almost certain to rise rapidly as we move further into the year. In the Bay Area, we are already on the cusp of spring, which typically sees the most heated market conditions of the year, and, not unusually, the highest median home sales prices.

"Our outlook for the U.S. economy is positive and offers a promising perspective on the housing market in the year ahead. We expect the U.S. labor market to continue to cool in 2025, which will reduce some of the pressures on inflation. And though we forecast mortgage rates to remain higher for longer, we expect the rate lock-in effect to cool off throughout the year as homeowners adjust to the new normal with respect to rates, therefore adding more inventory to the market." Freddie Mac Research, 1/28/25

 

 

Report created in good faith using data from sources deemed reliable but may contain errors and subject to revision. Last period figures are preliminary estimates based on data available in early February. All numbers approximate, and may change with late-reported activity.