Lower mortgage rates in Atlanta could spur bidding wars, rapid home sales in 2025

By Janelle Ward – Staff Reporter, Atlanta Business Chronicle

Home sales are expected to pick up across the country next year, particularly in Southeastern markets like Atlanta.

Roughly 4.3 million home sales are projected to close across the U.S. in 2025, according to year-end market predictions from national real estate company Zillow Group. This is up from the 4 million sales expected to close this year and the 4.1 million sales that were recorded in 2023.

Experts predict that fluctuating mortgage rates will act as a major stimulus, encouraging home sales among cautious buyers next year.

In the aftermath of the Federal Reserve implementing its first benchmark interest rate cut in four years back in September, the 30-year fixed mortgage rate dropped to a year-to-date low of 6.08% during the week of Sept. 26, according to Freddie Mac.

Despite another rate cut from the Fed earlier this month, the 30-year rate has trended upward over the past several weeks, climbing to 6.84% during the week of Nov. 21. 

Zillow economists predict that mortgage rates will rise and fall like this several times throughout 2025, giving buyers many opportunities to lock in a competitive rate before refinancing an existing mortgage or buying a new home altogether.

Available housing supply is also expected to increase next year, which should help prevent home prices from mirroring the same affordability trends witnessed in 2024. 

“Buying a home in 2024 was surprisingly competitive given how high the affordability hurdle became,” said Zillow’s chief economist, Skylar Olsen, in a prepared statement. “More inventory should shake loose in 2025, giving buyers a bit more room to breathe.”

Metro Atlanta specifically is expected to see a change of pace.

Kristen Jones, president and broker-owner of Re/Max Around Atlanta Realty, said in a prepared statement that local housing market conditions next year will likely favor potential buyers, but may turn more competitive if mortgage rates sink low enough. 

In extreme cases, the housing market could imitate behavior witnessed during the first few years of the decade, where record-low mortgage rates prompted buyers to enter the market at full force ⏤ and often at top-dollar.

“If rates drop below 6%, we expect to see bidding wars and offers with no contingencies,” Jones said. “Buyers who take the ‘wait and see’ approach may get a lower rate but will likely pay more for the property or, worse yet, lose out to someone willing to bid higher.”

Full article: https://www.bizjournals.com/atlanta/news/2024/11/25/housing-market-predictions-2025-zillow-home-sales.html