We had a bird's-eye view of the New York Stock Exchange on NYE 🎉 with NYSE TV!
We hit on the following 2024 topics and 2025 expectations...
📉 Mortgage Rates
We expect the 30-year mortgage to settle around 6% in 2025 and stay in that realm for the long-term.
📈 Prices
Home price growth is expected between 2.6 - 4%, thus outpacing expected inflation of 1.9 - 2.3%.
Median sales price for a single-family home in the U.S. is $437,300, up from $426,800 a month prior.
📈 Activity
Home Sales are expected to grow between 5 - 9% in 2025 (over 2024 volume), resulting in an estimated 4.2 existing home sales.
📈 Inventory
States that are above pre-pandemic inventory levels include Arizona, Colorado, Florida, Idaho, Oklahoma, Oregon, Tennessee, Texas, Utah, and Washington. States likely to join that list soon include Alabama, Nebraska, Hawaii, and Georgia.
📉 Rents
Asking rents decreased by 0.2% month over month in late 2024, slightly faster than the 0.1% decline that was the pre-pandemic average for this time of year. Rents are now up 3.3% from last year.
Rents fell, on a monthly basis, in 33 major metro areas. The largest monthly drops were in San Antonio (-1.1%), Denver (-1.1%), Austin (-1%), Richmond (-0.9%), and Salt Lake City (-0.7%).
📉 Big Home Builders
Lennar missed Q4 2024 EPS target and shifted Q1 2025 31% below prior consensus. They need an 18% profit margin to achieve sales goals. We expect 2025 to see a resurgence of the resale market, driven by increased inventory and lower loan rates, thus challenging the big homebuilders.
Additionally, newly proposed tariffs on imports from China and Mexico will make the cost to build higher, giving an edge to resellers.
📈 Commercial
We expect improvement in 2025, with some sectors seeing growth and others facing challenges.
Office - The office market is expected to see a revival, with vacancy decreasing and rents rising. However, the work-from-home trend and hybrid work will continue to cost the office sector money.
Retail - The retail sector has the lowest vacancy rate of any commercial real estate sector, but retailers will consolidate. Demand is expected to grow in suburban locations and Sun Belt cities.
Industrial - The industrial real estate sector will continue to benefit from e-commerce growth, but leasing activity will return to pre-pandemic levels.
Data Center - The demand for data center real estate is expected to continue to outpace supply.
💡 Other Industry Trends
Artificial intelligence, cloud computing, and the digital economy.
More thoughts in video above.
