For sale sign.
New forecasts from the Mortgage Bankers Association (MBA) and the National Association of Realtors (NAR) showed diminished expectations for home sales this year from their previous forecasts.
The MBA and NAR differ some on the details, but both said they expect the number of new and existing home sold this year to be nearly 7% higher than in 2024.
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The NAR’s March 21 forecast expects existing home sales will rise 6% this year, down from its Dec. 12, 2024 forecast range of 7% to 12% growth. It forecasts new home sales will rise 10% this year, down from its 11% forecast Dec. 12.
It also expects the median home price to rise 3% this year, up from its 2% forecast Dec. 12.
For February, the NAR reported that existing home sales were 1.2% lower than a year earlier. Sales fell for homes priced under $500,000, while sales rose for those priced at $750,000 or more.
NAR Chief Economist Lawrence Yun said new and existing home sales in 2023 and 2024 were at their lowest levels in 30 years, creating “a sizeable pent-up demand.”
New home sales have recovered to their pre-COVID levels, while existing home sales need to grow “much, much more” to return to recover.
Existing homes sales appear “to have bottomed out and are ready to turn the corner,” Yun said.
The economy is still producing jobs and housing inventory is beginning to improve. “Now if only the mortgage rates could come down, it would really provide a tail wind — a huge boost to housing demand,” he said.
The MBA’s March 20 forecast pared back home sales and purchase mortgages from its Feb. 19 forecast.
For sales, it lowered its 2025 forecasts by 1.1% and raised them 1.1% in 2026.
The MBA now expects existing home sales this year will rise 6.5% this year, instead of the 7.3% growth forecast Feb. 19. It expects new home sales will rise 8.4% this year, down from 10.7% growth in its Feb. 19 forecast.
The MBA lowered its purchase forecasts by 2.1% in the second quarter and 0.7% in the fourth quarter. For the year, it expects purchase originations to rise 9.2% to $1.41 trillion, down from the 10% growth in its Feb. 19 forecast.
However, it raised its forecasts for refinances in the second and third quarters, and lowered them slightly for the fourth quarter. The net result was to boost its originations forecast by 3.9% for the year. It now expects refinances will rise 35% to $663 billion in 2025.
For the year, total originations were revised upwards by 0.7% to $2.07 trillion, which would be 16.3% higher than 2024.
If those changes sound familiar, the MBA sort of reverted to its Jan. 19 forecast.
Contact Jim DuPlessis at [email protected].
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Jim DuPlessis
Jim covers economic data trends emerging for credit unions, as well as branch news and dividends.
