My Reaction to Zillow's 2025 Real Estate Forecast!

Hey folks, Dan Ferreira here with your market update for Christmas Eve 2024. So Merry Christmas out there to everybody and Happy Hanukkah. We're gonna talk about today is my pre-forecast, pre-forecast of what to expect in 2025. And the reason being is I had a Zillow analyst, I was watching his video this morning and it was intriguing on what Zillow says on what house prices are gonna do in 2025. And then when it comes to interest rates, it's all over the map. People are estimating between five and a quarter and 7%, a huge rain there. I'm gonna give you my pre-pre-forecast at the end of this video to give you my, basically a range of where I expect some things to be. And then I'll have a video coming out next week, kind of diving into these a little bit more in detail. So mortgage rates, they were steady right now, they'll be steady today, the bond market closes early. So let's get over to the economic calendar and this is the reason why I'm doing today's video. Folks, there's nothing here. On Tuesday, the markets are closing at one o'clock and so there's gonna be minimal trading. We're not locking anybody today. We haven't locked anybody yesterday. The markets are too volatile. So let's get over to the content we're gonna go over today. We have Zillow's economist right here. He's gonna tell us what Zillow's expecting in 2025. And then I'm gonna give you a laundry list of expectations from some of the country's largest economists. And then we're gonna take a small little dive in mortgage rates because there's analysts that I'm looking at so far have rates from five and a quarter for 2025 to 7%. So I'll give you a kind of a range where I'm gonna be in. And then my real forecast coming out next week, I'll kind of pinpoint a little more narrow range in there for you guys. So let's first take it away with Zillow's economist. And then when we come back, I'm gonna go over and show you how all, several other economists are expecting housing prices to go as well as those rates. So let's get over to it. But Zillow is sticking with its optimistic 2025 housing forecast right now. Orfi Devonghi is Zillow's senior economist, joins us right now with the take. And Orfi, this interest rate story is one that's gonna be of a particular interest to home buyers out there. So what is the forecast for rates next year? Yeah, look, traders tend to, we all tend to overreact a little bit to economic use. A higher productivity means the economy is strong, but it's also slowing. I think slower growth than anticipated in 2025 could actually result in more Fed rate cuts than currently anticipated. Yields and mortgage rates could potentially ease somewhat. And so with lower mortgage rates, easing mortgage rates from where they are right now, we expect home sales to actually increase in 2025. If home sales are going to increase, where are we gonna see most of the activity, Orfi? Is it gonna be in the previously owned homes, existing homes, so to speak? Is it gonna be in all the new construction that people are trying to put on the market? Look, I think new construction will continue to dominate. We saw new home sales increased again in November, despite the increase in mortgage rates. Mortgages have been increasing somewhat since I think September, October. So new home sales are up 9% from a year ago. We should see existing home sales also rebound somewhat, maybe not as much. Homeowners are starting to come back on the housing market. Inventory is up about 17% from the previous year, from last year. And so more options for buyers, a little bit more bargaining power, a slight improvement in affordability could be good for the housing market. It's gonna be a healthier housing market in 2025. Orfi, are there specific geographies that you're keeping track of as to where will be hot and where will be kind of colder, relatively speaking, in the US? Yeah, I think, look, you have markets that have built a lot. So those markets are kind of Austin, Texas, some of the Texas markets. You have the Florida markets where inventory is much higher than it was before the pandemic. I think those markets are going, with more options, those markets are gonna benefit somewhat in terms of sales, total sales. I think that's probably where we're gonna see a little bit of an increase. You also have markets near these big job centers, like these expensive markets like New York and Boston. Markets surrounding those areas, slightly more affordable, could also see an uptick next year. Orfi, when you look at the geographic locations of the housing, how much focus are you putting on back to work where now companies are not demanding but asking in a very firm manner for employees to be in five days a week? Do you think that's gonna put pressure on homes, on secondary homes that people bought during and after the pandemic? Yeah, if you look at the data, our data, Zillow Surfers, where are Zillow Surfers looking? They're definitely looking closer to those job centers. We're looking at places like Sunnyvale in California, slightly more affordable than Palo Alto, for example. Some of those markets are starting to see a bit of an uptick in the number of people searching in those markets. So what I pointed out there was, it says mortgage rates have to cooperate. So that's the dilemma we have right now. So let's get over to what analysts are saying. 2025 home prediction forecast or home price forecast continues with strong gains. So we've gone through this article, and this was just posted on the 17th, and here's what the summary is. It goes from Apollo Global Management. It's saying the market's gonna be up 10.8% nationally, all the way down to Moody's is saying it's gonna be negative 0.4%. So none of these are predicting a crash, and a lot of you guys might be saying, well, they never predicted crash. Well, the last crash we had was 2008, and I think a lot of people, once the tailwind started on that, a lot of people realized what was happening and how dismal it was. But right through here, I'm not expecting a housing crash. I'm probably in the range, I'll just give you an idea, from zero to about two to 3%, and I'll explain why in my forecast videos. So that's what we're seeing right through here. Zillow's saying it's gonna be 2.9 up, Redfin 4%, and everybody else through here, housing wire is 3.5%. So right through here, it's probably a consensus of about two, three, 4% in that range. Now, mortgage rates. Here's where the kind of dilemma was. I watched, and I watch a lot of YouTube videos. I know a lot of these people that post these videos personally, reach out to them, and I see their expectations of where rates are gonna be. And there was a couple that were saying, okay, the rates are gonna be about 5 1⁄4 to 6. I'm not on that bandwagon, folks. Well, let's go down through here and see what's going on. I'm gonna be more on the bandwagon of right through here. Rates will remain above 6%. Between 6% and 7% is a big range, but that's where I'm expecting them to be. I'll tighten that range for you guys, on my, like I said, my forecast video next week. But a lot of analysts are right in this range as well. I'm not in the 5% range. I don't think the, unless inflation just kind of plummets and the tariffs don't have as much effect on things, the inflation fronts, as a lot of people expect, you know, that could happen. But I expect, here's my expectations. I think tariffs are gonna work. Short-term, they're gonna be inflationary, but they will bring a lot of people to the table. That'll help on the inflation front eventually. So I'm thinking, you know, earlier in the year, we're gonna be right in the range where we are right now. Second to third quarter, things might start to ease based on those tariffs and a lot of negotiation skills, hopefully, from our future government. So that's what I'm expecting, expectations are right there, folks. So that's what I'm looking at. I'm not seeing a crash, or nobody's really seeing a crash in 2025, other than the crash people that make money on those videos. They really have no, you know, again, let's go back to it. And I know a lot of people are like, Dan, just get off of this. But, you know, people have been saying the crash is gonna happen since 2021. And then they're like, okay, it didn't happen. And then 2022, 2023, and then we start hearing about, well, you know, it's gonna take a lag effect. It'll happen in three or four or five years. You know, folks, the markets change, as you know. You know, basically every time the Federal Reserve says something, the markets change. So we don't know what's gonna happen in 2026, 27, 28. We really don't even know what's gonna happen in 2025. We can only give you our forecast, but based on our experience and the data that we watch. So I'm not into making money on YouTube just to have you guys click. I'm here to provide you the information. That's relevant if you're looking to buy your house. And the main point on this is, if you're looking to buy in 2025, pay attention to your market and your market only. You don't care. You know, if you're in Des Moines, Iowa, you don't care what Austin, Texas is doing. Please don't take all these points from a lot of people saying the market's gonna crash. Make sure you research your area. And that's what I'm here to help you do, to point you in that direction. I did create a website, just a little bit of a spinoff, like a squirrel thing. I created a website for credit. So if you wanna learn more about credit, dive into some free credit scoring systems, dive into getting your FICO score, the main credit score people use when they're buying homes, you have to make sure you're focusing on your FICO score. So I created a website. Check it out. There's a whole bunch of tools here for you to check in. There's a lot of free stuff in here. And a lot of that free stuff, don't pay extra for the super subscriptions on things. Just use the free stuff. And if you wanna look into or dive into something, if you're gonna pay for anything, I'd highly suggest you check out the true credit scores. This will route you to my FICO, and you need to check out what your FICO score is before you really get the ball rolling to try to get qualified to buy that first house. So my name is Dan Frio. What do I do? Well, I'm a loan officer. That's what I do for a living. I close probably 10 loans, five to 10 loans personally myself. My team does much more than that. We'd love to help you. Okay, I've been doing this as of next month. It'll be 36 years, so I got a lot of experience under my belt. What we pride ourselves on here is maybe we might not have the best rate. You know, I know my channel is The Rate Update. I inform you guys on what's going on with rates, programs, and things like that. Where we wanna be your partner in this journey is imagine one application, one credit pool, and we're gonna shop your loan over to 40 different lenders. Let's say that's what I can do for you. No matter where in the country you live, I'm licensed in all 50 states as well as Puerto Rico. I'd love to help. So how do you reach out to me and my team? Well, go to therateupdate.com. Here's our website. If you wanna put in your application, you just click here and you're on your way. But we strive to do this. You need to vet us. You need to talk to us, figure out if we, there's good synergy there. We have the programs for you because we work with over 40 different lenders. We're actually, I work at ServBank. ServBank is the number 10 largest mortgage servicer in the country. So we're a big company. We're also one of the country's largest mortgage brokers, set up with over 40 different lenders at this time. So that's why I say one application, one credit pool, and we're gonna shop your loan all over the country. My experience and my team's experience, we all have over 20 years experience in the business. We can help maneuver you from basically signing on that application link right through there to keys in your pocket. So please schedule a consultation call with us. This is what we prefer to do. So again, so you can vet us. We can actually learn your story. If you'd rather call in, you can do that as well. Just scroll down to the bottom row of my website and you're gonna find that information right through there. Our phone number is 844-775-5626, or you can reach me personally at danatherateupdate.com. Yes, it will be me answering. If you put your phone number in there and their question, I'll probably most likely be giving you a call to answer that question for you, at least kind of dig into that issue for you. So thanks again so much for watching. God bless, Merry Christmas, Happy Hanukkah out there, and I'll see you tomorrow. Bye-bye.