As we step into a new year, let’s take a moment to reflect on the 2024 real estate market and
what lies ahead in 2025.

Just as I predicted last January, the majority of real estate sales occurred in the first half of the
year. However, the anticipated drop in interest rates during the last quarter didn’t materialize.
Instead, the market experienced a slowdown in both home sales and rentals during the second
half of 2024.

It was a roller coaster year for both Realtors and the public, as described by Thomas Muton,
Chair of the Houston Association of Realtors, in his article in Houston Agent Magazine. From a
volatile presidential election to persistently high interest rates, a high-profile commission
lawsuit, and more, 2024 kept everyone on their toes.

Shifting Market Dynamics
Throughout the year, homes lingered longer on the market, with average days on market
increasing from 48 to 51 days. Many Houston markets transitioned from a strong seller’s market
to a buyer’s market as inventory levels rose to 4.4 months. Buyers became more critical, often
offering below list price, which began to place downward pressure on home prices.

This decline in home prices was largely driven by affordability concerns. High interest rates and
rising insurance costs made the average monthly payment unaffordable for many buyers, pushing
them out of the market altogether.

Looking Ahead to 2025
Despite the challenges of 2024, the early signs for 2025 are promising. Just this week, we
received multiple offers on several listings, and one Open House drew an impressive 16 visitors
over the weekend.

Over the past three years, we’ve seen the real estate market kick into high gear as early as the
first week of January, with strong momentum carrying through to August. 2025 appears to be
following a similar trend.

Even with mortgage rates hovering around 7% at the close of 2024, buyers are re-entering the
market. My prediction? Buyers are starting to accept that 6%-7% interest rates are the “new
normal,” and many are tired of waiting for rates to drop. The mantra “Date the Rate, Marry the
House” will likely fuel a surge in home sales in 2025. With more inventory expected to hit the
market, home prices should stabilize.

A Great Year Ahead

I believe 2025 will be an excellent year to buy, sell, and rent homes. Whether you’re looking to
make a move or simply exploring your options, now is the time to act.

Here’s to a productive and prosperous year in real estate!