The Q1 2025 VeroFORECAST anticipates a modest average nationwide home price appreciation of 2.4% over the next twelve months, a slight deceleration from the previous quarter’s projection of 2.7%. This outlook is underpinned by largely consistent fundamental conditions compared to the prior quarter. Persistently high mortgage rates, a dominant market factor for several years, are expected to remain elevated with limited near-term reduction. Stubborn inflation, highlighted by a recent rise in the core Personal Consumption Price Index before the full impact of tariffs, will likely keep the Federal Reserve maintaining current interest rate levels. While the labor market currently shows stability, potential consequences from layoffs could emerge in the coming months.
As the spring selling season commences with higher inventory levels than last year, it is providing buyers with greater negotiating leverage, suggesting a limited average home price increase nationwide, as indicated by the forecast. However, this national picture obscures significant regional variations.
The Northeast and Midwest remain strong markets due to low inventory and relative affordability compared to the Sunbelt regions. The slowdown in remote work and the return to office trends have also curbed outmigration from the Northeast and Midwest, while retirees face affordability challenges. Conversely, rising insurance and HOA fees are dampening demand in Florida, and substantial new construction in the Sunbelt has increased supply, moderating prices and even causing depreciation in some areas. The spring season presents a cautiously optimistic national market, where hopes for easing rates and prices are tempered by concerns over tariffs, persistent inflation, and broader economic anxieties that could impede a stronger recovery.
Read the full Q1 2025 VeroFORECAST report on Veros’ website for the top 10 and bottom 10 performing markets.
Click here for the full report: Will Home Prices Rise or Fall?
