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s we enter 2025, the real estate market stands at a critical juncture. After years of navigating elevated mortgage rates and limited housing inventory, there's finally a glimmer of hope on the horizon. While challenges persist, opportunities abound, and Realtors are uniquely positioned to guide clients through this evolving landscape.
The National Association of REALTORS' settlement, granted final approval in November, is a significant development that supports transparency, competition, and choice. This agreement empowers agents and consumers to negotiate services and compensation that work for them. One key aspect of the settlement requires buyer's agents to obtain written agreements from buyers before touring homes, ensuring they understand their agent's services and how they'll be paid.
As we adapt to these new business practices, Realtors remain committed to serving as trusted guides for clients during one of life's most significant transactions. Against this backdrop, the market is showing signs of stability and recovery. Home sales are forecast to increase by 9% in 2025 and 13% in 2026, while the housing inventory shortage eases with increased new-home construction and more sellers entering the market.
Mortgage rates are stabilizing, with a consistent range of 5.5-6.5% expected, creating a new normal. The Federal Reserve's anticipated rate cuts will further support this stabilization, giving buyers and sellers confidence to reenter the market. These factors are laying the groundwork for a healthier housing ecosystem.
Homeownership remains a cornerstone of building generational wealth in America, with household equity reaching record highs. However, affordability remains a pressing challenge for many buyers, especially first-time buyers. To those working with these buyers, your efforts are meaningful and impactful. Together, we can ensure that buyers feel supported and prepared to achieve their dreams.
NAR's focus is on addressing housing affordability and availability while empowering members and protecting consumers. This year, we're advocating for policies that increase housing inventory through tax incentives, improve access to homeownership, and expand economic opportunities. Collaboration will be a defining theme in 2025 as we work with local and state associations to address challenges and seize opportunities together.
I'm optimistic about what 2025 holds for real estate. Realtors are resilient, adaptable, and the fabric of our communities. Together, we can turn challenges into opportunities, strengthening the real estate market and helping individuals and families build a better future through homeownership. Thank you for your dedication to this profession and your unwavering commitment to your clients.
