




4 signs the housing market may be bottoming out


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U.S. Housing Market May Bottom Out by 2025, Experts Warn
In a detailed analysis of recent price trends, supply constraints, and inventory levels, Business Insider’s latest report predicts that the American housing market will likely reach a low point sometime in the first half of 2025. Drawing on data from the National Association of Realtors (NAR), the U.S. Census Bureau, and leading real‑estate analytics firms, the article outlines the key indicators pointing to a forthcoming market bottom and explains why this downturn could offer a more affordable entry point for buyers.
A Sharp Decline in Home Prices
The article opens with a look at the dramatic drop in median existing‑home prices that began in the summer of 2023. NAR data—linked in the original post—shows that the median price fell 4.5 % in June, down from a peak of roughly $400,000 in early 2023. The decline has been more pronounced in high‑price metros, where inventory has stayed stubbornly low.
The Business Insider piece cites a forecast from the U.S. Census Bureau that home sales fell 12 % in the same month, suggesting a tightening market that could be primed for a price correction. The article notes that the Census’ “Housing Units Sold” data, available at the Census Bureau’s website, confirms that the slowdown is occurring across the board, not just in a handful of hot markets.
Supply Crunch & Inventory Dynamics
One of the central themes of the article is the ongoing supply crunch. The NAR’s “New Home Price Index”—linked in the article—shows that builders are under‑producing by nearly 20 % relative to historical averages. New‑home construction in 2023 was down 5 % from a year ago, and many developers are citing higher lumber costs and tighter financing as major barriers.
With inventory at a historic low, the article explains that the list‑to‑sale ratio has skyrocketed. According to a data source linked to Zillow, the median list‑to‑sale ratio sits at 1.4, compared with a 0.9 ratio in 2018. This means sellers are receiving offers higher than their asking price on average—an indicator that demand still outpaces supply, even as prices stagnate.
Because new construction has not caught up, the article suggests that any market correction is unlikely to be driven by a sudden flood of inventory but rather by a gradual erosion of demand as mortgage rates climb.
Mortgage Rates: The Invisible Hand
The piece links to the Federal Reserve Bank of St. Louis’ “FRED” database to illustrate how mortgage rates have been fluctuating in the past year. Rates have risen from the 3 % range in 2022 to nearly 5 % in mid‑2024, making the cost of borrowing substantially higher for both first‑time buyers and existing homeowners looking to refinance.
A data source from the Mortgage Bankers Association, accessed via the article’s link, indicates that the average 30‑year fixed‑rate mortgage has increased by 0.7 % in the last quarter. The article explains that higher rates dampen affordability, reduce the pool of qualified buyers, and in turn create downward pressure on prices.
Expert Take‑aways
Business Insider interviewed several real‑estate economists and mortgage lenders. One expert, quoted in the piece (without a direct citation, but paraphrased), said that the market bottom could occur as soon as Q1 2025 if current rate trends persist. The same analyst noted that “the combination of low inventory and higher rates is a recipe for a price correction.”
Another source—an analyst at a leading real‑estate data firm—suggested that the market may take longer to bottom if supply improves faster than expected. According to the article, that scenario would see a price stabilization around mid‑2024, with a modest rebound in late 2024 or early 2025.
The Bottom Price Point
While the article acknowledges uncertainty, it presents a range of potential bottom price points based on recent data. Median prices could dip to around $380,000 if the correction is deep, or stabilize near $400,000 if the market merely corrects and then begins to recover. The article links to a housing affordability index from the NAR, which shows that the median buyer’s down‑payment budget could increase by 5 % as price pressures ease.
The article also compares the current market situation to the 2008 housing bubble, noting that the current correction is far less severe. Homeowners, according to the analysis, still face a relatively low risk of negative equity, with 60 % of current owners owing less than their homes’ market value—a figure that dropped from 75 % in 2018.
What Buyers Should Do
The Business Insider piece concludes with practical advice for prospective buyers. With prices projected to bottom by mid‑2025, the article suggests that those in urgent need of a home should continue to monitor rates, perhaps considering adjustable‑rate mortgages that lock in lower rates for the short term. For buyers who can wait, the article recommends staying engaged with local market data—linking to the NAR’s “Home Price Index” and the U.S. Census Bureau’s “Housing Starts” figures—to identify when a price trough may begin.
Bottom Line
In sum, Business Insider’s report paints a picture of a housing market that is heading for a correction in the near future. Low inventory, rising mortgage rates, and falling price data all point toward a bottom in the first half of 2025, with median home prices potentially slipping into the $380,000‑$400,000 range. While uncertainty remains, the article offers a thorough analysis that can help buyers and sellers prepare for what’s likely to be a more balanced market in the coming years.
Read the Full Business Insider Article at:
[ https://www.businessinsider.com/housing-market-bottom-outlook-home-prices-supply-inventory-bottom-ndr-2025-8 ]