As we head into the final quarter of 2024, the real estate market continues to surprise many. Despite recent Federal Reserve rate cuts, mortgage rates have climbed, leaving buyers and sellers with more questions than ever. In this month’s real estate update, I’ll break down what these trends mean for you and share what experts are forecasting for the 2025 housing market.

Mortgage Rates: Why Are They Rising?

Earlier this year, many hoped for a significant drop in mortgage rates, expecting rates to fall into the 5% range by now. Unfortunately, that hasn’t happened, and we’re still seeing rates hovering around 6.2%. This uptick, despite the Fed’s actions, can be explained by broader economic factors, which have kept rates high longer than anticipated. However, there’s hope that rates could dip back to around 6% in early 2025.

What does this mean for buyers? A recent study found that over half of the buyers who put their home search on hold would return to the market if rates fell to 6%. If you’re waiting for rates to drop, now might be the time to start preparing for what could be a more competitive market come 2025.

Home Sales: A Recession in Real Estate?

While the broader economy has stayed relatively strong, the real estate market has been in a recession of sorts. Transaction volumes have significantly decreased since 2021. In fact, 2023 saw some of the lowest total home sales in decades, and 2024 is expected to finish with similarly low numbers.

Looking ahead to 2025, expert forecasts suggest we could see a rebound. The Mortgage Bankers Association predicts 5.2 million total home sales, while the National Association of Realtors expects 5.7 million, driven by increased activity following the presidential election—a trend we’ve seen repeatedly over the past 50 years.

Home Prices: No Relief in Sight

For those hoping home prices might come down, the data isn’t promising. Every major forecast, from Fannie Mae to Goldman Sachs, projects home price appreciation in 2025. While the range varies from 0.3% to 4.4%, the key takeaway is clear—prices aren’t expected to fall.

What’s Happening in Frisco?

Locally, home prices have remained relatively stable throughout 2024. While we’ve seen slight fluctuations month-to-month, the median home price in Frisco sits at around $672,450, down just 3.5% year-over-year. This price stability is largely due to low inventory levels, which remain well below pre-pandemic numbers despite the surge in new construction.

Frisco is expected to follow the national trend of modest appreciation in 2025. Currently, homes in Frisco are selling within 3.5% of their original list price and the current pricing trends shows that pricing will remain stable into the 1st quarter of 2025.

If you’re considering buying or selling in the near future, it’s important to keep an eye on mortgage rates. When rates dip below 6%, buyer activity will likely increase, putting upward pressure on prices once again.

Where to Watch the Full Update

Watch the full October 2024 Real Estate Market Update below for more insights and the latest trends affecting Frisco!

If you’re thinking about buying or selling in Frisco, now is the time to start planning. Schedule a free, no-obligation consultation with me today by clicking here. Let’s discuss what’s happening in the market and what strategies could help you achieve your real estate goals.

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