F
ederal policy changes may have a significant impact on real estate in 2025, but economists predict modest shifts in the market. Key points include:

    Home sales and prices are expected to rise, albeit slowly. Economists forecast an uptick in new home construction due to potential regulatory easing, which could lead to increased inflation and higher mortgage rates.

    Mortgage rates will likely remain above 6%, while agent commissions may decrease. Forecasters from various companies have differing predictions for the market:

    * Bright MLS: Home sales will reach 4.4 million (7.5% increase), with home prices rising 3.1%.

    * Realtor.com: Sales will slightly exceed 4 million, with a 3.7% price growth.

    * Redfin: Sales will range between 4.1 and 4.4 million, with a 4% price increase.

    * Zillow: Home sales will rebound to around 4.3 million, with a 2.6% price growth.

    New home construction could surge if regulations ease, potentially cooling off prices in some markets. Economists predict year-over-year price growth, but at a slower pace than recent years.

    Mortgage rates are expected to stay above 6%, despite potential rate cuts from the Federal Reserve. If inflation rises due to Trump policies, mortgage rates may remain elevated.

    Agent commission rates will likely decrease, particularly for luxury homes and in competitive markets. Industry consolidation is also expected to increase as the new administration's Federal Trade Commission becomes more willing to approve deals among larger companies.

    The market balance will shift in some areas, with sellers having less leverage in regions where affordability is an issue. The Southeast is currently a buyer-friendly market, but this trend may spread to the Southwest if mortgage rates fall sharply.