Despite home sales hitting a 30-year low, the long-term population growth in the U.S. indicates a likely rebound in homebuying activity soon. With 70 million more Americans today than in 1995, coupled with escalating housing needs, it’s improbable that home sales will stay low for long, despite the current economic complexities.
At present, as buyers face higher borrowing costs and a limited housing supply, the market is beginning to offer more options. To invigorate the market, the National Association of Realtors is pushing for legislative measures, including incentives for small-scale investors to sell to first-time buyers and an increase in the capital gains tax exemption on primary residences.
While the Federal Reserve has delayed the anticipated rate cuts originally expected this spring, many experts now foresee multiple reductions by the end of 2025, potentially starting as early as September. Forecasters predict a consistent yearly increase in home sales over the next decade.
Additionally, as consumers adapt to what seems like permanently high inflation, they are increasingly considering real estate a safe financial investment. This shift in perception, viewing real estate as an appreciating asset and a dependable inflation hedge, is expected to further boost homebuying activity.