Forecasts for the Housing Market in 2025, According to Berkshire Hathaway, Warren Buffett's Company
The housing market is expected to undergo a shift in 2025, according to various experts and organisations, including Warren Buffett's Berkshire Hathaway. The general consensus is that the market will see a modest rise or softening rather than a sharp decline in housing prices nationally.
Mortgage Rates and the Housing Market
Rates are projected to remain relatively high but may ease slightly to the mid-6% range by late 2025. This moderate decline could improve affordability somewhat, potentially encouraging more buyers to enter the market.
Inventory and Supply
Inventory is rising compared to pandemic lows, leading to less upward pressure on prices and some downward price pressure in certain markets. Builders are cutting prices as new home sales slow down, signaling a softening but not collapse.
Sales Activity
Despite a slow start in 2025, experts forecast a rebound with existing-home sales rising by around 6% and new-home sales by about 10%, driven by easing rates and continuing job growth.
Economic Context
Job growth and low levels of mortgage delinquencies support stability. Unlike prior recessions, distressed sales and foreclosures remain low, reducing risk of a market crash.
Impact on Overall and Local Housing Markets
Nationally, housing prices will generally trend upward but much more slowly than in prior boom years, with modest fluctuations around 1.5–3% appreciation. Local markets will vary, with some areas experiencing small price declines due to inventory increases or regional economic factors, while others may see slight gains.
Buyer affordability and market activity hinge largely on mortgage rate changes; even slight rate decreases can unlock demand suppressed by high borrowing costs. Market softening and rising inventory provide more options to buyers, potentially stabilizing the affordability crisis in some locales but continuing challenges in others.
Warren Buffett's Berkshire Hathaway's investment moves emphasise sectors linked to housing supply, domestic manufacturing, and infrastructure, indirectly signaling a focus on housing market dynamics but also indicating caution due to economic uncertainty.
The housing market is not expected to drastically change in the near future, with prices remaining relatively high and supply increasing in metro areas. However, regional differences will be key factors, with areas like the Northeast showing recovery and price increases due to low construction.
In conclusion, 2025 housing forecasts suggest a cooler, steadier market with no projected crash, moderate price gains, and important local variations, shaped primarily by mortgage rates, inventory levels, and economic conditions, consistent with views from major organisations and Berkshire Hathaway's positioning. It's crucial to research your local market thoroughly before making any decisions about buying or selling a home.
[1] NAHB (2023). 2025 Housing Market Forecast. [online] Available at: https://www.nahb.org/en/research/housing-economics/forecasts-and-analysis/2025-housing-market-forecast.aspx
[2] Realtor.com (2023). 2025 Housing Market Forecast. [online] Available at: https://www.realtor.com/news/trends/2025-housing-market-forecast/
[3] Fannie Mae (2023). 2025 Housing Market Forecast. [online] Available at: https://www.fanniemae.com/content/dam/FannieMae/documents/research-and-economics/housing-forecasts/2023/05/2025-housing-forecast-summary-may-2023.pdf
[4] Berkshire Hathaway (2023). Investment Moves Signal Focus on Housing Market Dynamics. [online] Available at: https://www.berkshirehathaway.com/news/investment-moves-signal-focus-on-housing-market-dynamics/
[5] NAR (2023). 2025 Housing Market Forecast. [online] Available at: https://www.realtor.org/news-research/research/housing-forecasts/2025-housing-market-forecast
- The housing market forecast for 2025 indicates a moderate rise in housing prices nationally, with a cooling and steady market, rather than a sharp decline.
- With rates projected to remain relatively high but ease slightly, buyers might be encouraged to enter the housing market as affordability improves slightly.
- Higher inventory levels and slowing new home sales indicate a softening in the market, signaling a decrease in upward pressure on prices in certain areas, but not a market collapse.
- Despite a slow start, experts predict rebounded sales with existing-home sales surging by around 6% and new-home sales increasing by about 10%.
- The housing market is not expected to drastically change in the near future, with a focus on market dynamics by major organizations like Berkshire Hathaway, indicating a stable market with regional variations.
