In this week’s episode of the RealTrending podcast, host Tracey Velt is joined by Altos Research founder and president Mike Simonsen to discuss expectations for the housing market and the impact of the Trump administration’s policies.
This conversation has been edited for length and clarity. To start, Velt and Simonsen explore the recent HousingWire market forecast for 2025.
Velt: We could first start with home prices and sales. You’d said that they would grow in 2025 by about 5%. Do you really still feel like that’s a realistic goal?
Simonsen: Our forecast remains plus-5% for the year. During a year, you’re going to get some months when sales are better than others. If mortgage rates haven’t eased back down again by March, we will have to revisit that forecast, and home sales volume isn’t going to materialize. It’s not there yet, but we’re starting. We took a step backward to start the year.
Velt: What was your forecast for home prices?
Simonsen: We would get about 3.5% price gains nationally for 2025. If you look over the long-term history of the country, 50 years or more, it’s actually pretty normal to have a 5% gain in a given year. We’re underperforming on that long-term trend because we have an affordability challenge.
Velt: Talk to me a little bit about that and what you see with a new incoming administration.
Simonsen: It’s not about just giving a tax incentive. We have to build more homes so the cost of homes comes down. One of the challenges with affordability is that we have the crisis at a national level, but the control happens at a very local level. If we start to get more national recognition and some control changes, maybe some progress can be made.
Velt: Yeah, I feel like there are a lot of things coming together. And if you take them separately, like tariffs and immigration, then it’s not necessarily the full picture of things. You’ve also got energy. So, it’s hard to tell what’s actually going to happen.
Velt: As far market bright spots, where are you seeing the markets that are still continuing to do really well around the country?
Simonsen: So, we have 25% more homes on the market now than we did in January of last year. Most of that has been in the Sun Belt states across the South. Inventory is much tighter in the Rust Belt and the Northeast. So, places like Chicago or upstate New York. Connecticut has 70% fewer homes on the market now than they did in 2019.
To close the conversation, Simonsen explores more thoughts on the market going forward.
Simonsen: In our forecast document, we talked about mortgage rates and we expected that rates would stay in the 6s. But they could get over 7 — and they did already. There’s no scenario where rates get close to 5. Five and a half seems really far away.
