EXp Realty CEO expects US home sales will rise modestly this year and a
more buyer-friendly market
[March 06, 2025] By
ALEX VEIGA
LOS ANGELES (AP) — Elevated mortgage rates and rising home prices are
freezing out many would-be buyers, keeping the U.S. housing market in a
sales slump dating back to 2022.
While home sales are off to a soft start this year, it hasn’t been all
bad news for home shoppers.
The average rate on a 30-year mortgage, while still near 7%, has been
easing in recent weeks. And the inventory of homes for sale is up
sharply from a year ago, which makes for a more buyer-friendly market
than in recent years.
Still, after years of skyrocketing home prices, these trends may not
make much of a difference for many prospective home shoppers, especially
first-time buyers who don’t have equity in a property that they can use
toward a new home purchase.
What does this mean for the spring homebuying season?
Leo Pareja, CEO of real estate brokerage eXp Realty, recently spoke to
The Associated Press about his expectations for the housing market, the
trajectory of mortgage rates and how home shoppers in places like
Florida, Texas and other states where home listings have risen sharply
are likely to have more leverage when it comes time to negotiate with
sellers. The interview has been edited for length and clarity.
Q: How do you see U.S. home sales shaping up this year?
A: In 2024, we ended the year roughly around 4 million resales with
about 700,000 new construction. Going into the year, we feel based on
the data from multiple sources, that we’ll probably be up year-over-year
from ’24 to ‘25, so we’re hopeful that resales end up somewhere between
4.2 million to 4.3 million, with new construction maybe increasing from
700,000 to 750,000. So, the term for us would be cautiously optimistic.
That’s kind of the reading of the tea leaves based on the economic data
we have. But I will tell you that going into like the first 50 days of
the year, the anecdotal boots on the ground feedback is kind of lining
up with that thesis.
[to top of second column] |
 Q: Do you also expect the spring
homebuying season to be better than last year’s?
A: We are hopeful that it will be slightly better than ’24 or ‘23,
because we just had this kind of constant decrease in activity
starting with 2021. So, we’re cautiously optimistic it’s going to be
a little bit better.
Q: Does the pickup in homes for sale, such as in
parts of Texas and Florida, signal that the market is tipping more
in buyers’ favor?
A: I think that’s a fair assessment. Economics are quite simple in
the supply and demand relationship of product to opportunities. I
think of the buying opportunity as a three-legged stool between
affordability, inventory availability and then finance ability. So
one, there’s more inventory to choose from, which creates more
opportunity. Then the last one being the tough one, right? We don’t
see rates dropping by any significant levels.
Q: Should buyers in these markets expect that sellers will be more
flexible than they’ve been in recent years and offer concessions
like helping with closing costs or to buy down their mortgage rate?
A: I do hear across the board that builders are being aggressive and
creative in order to move their inventory. Historically speaking,
the more inventory, the more flexible a seller gets and willing to
contribute to concessions, which can be used for any multitude of
things.
Q: How low would the average rate on a 30-year mortgage need to come
down to drive a strong increase in home sales this year?
A: I think the Goldilocks range is in the low 5% to really spur both
buyers and sellers because they’re mutually tied together on the
sell side. But I don’t think, based on the economic data we’ve been
looking at, that rates really get much of a reprieve. I’ll be as
bold to say in 18-to-24 months. I don’t see it definitely happening
in 2025. I’m not betting on a big improvement in rates. But the fact
that we’ve kind of been in this new normal for a while, I think we
no longer have the folks who are sitting on the sidelines kind of
holding their breath for it to come back down to 3%
All contents © copyright 2025 Associated Press. All rights reserved |
