As 2024 winds down, we’re looking ahead to 2025 and what’s in store for Long Island real estate. This past year offered some surprises: inflation remained high throughout much of the year, and interest rates didn’t drop as much as economists predicted. Will 2025 bring more of the same, or will it offer unique opportunities for sellers and buyers? Check out our 3 predictions for Long Island real estate in 2025!
Mortgage Interest Rates Will Decline
Will mortgage interest rates drop in 2025, increasing affordability for prospective home buyers? Most economic experts believe rates will come down but don’t expect to see a huge change. Echoing other prominent industry experts, Lawrence Yun, chief economist of the National Association of REALTORS®, predicts rates will stabilize at the low end of the 6% range in 2025 and 2026.
As of writing, the average interest rate for a 30-year fixed-rate mortgage is 6.81%, according to Bankrate. The Federal Reserve (Fed) is meeting next week, and with the recent news that US inflation ticked up again slightly this fall, we may see another cut to the standard interest rate before the end of 2024. While the standard interest rate does not directly correlate to mortgage interest rates, they tend to move in tandem. If the Fed doesn’t cut rates at their December meeting, mortgage rates may be slower to decline through the first part of 2025.
Long Island Real Estate Sales Will Increase
After years of low inventory across the US, housing inventory is approaching pre-pandemic levels. In some parts of the country, the supply of homes is already equal to or above where it was in 2019. Here on Long Island, however, our inventory remains low.
Buyer demand is also expected to be strong in 2025. If you’re considering selling, low inventory and high demand equal opportunity. You may be able to command a higher price for your home this year, especially when paired with our strategic and innovative marketing strategies. No matter the market, we are known for setting community and neighborhood records on Long Island. Curious about what your home might be worth? Get in touch with us now.
Home Values Will Continue to Appreciate
Home prices are expected to grow modestly nationwide in 2025. Experts predict that homeowners will see an appreciation gain of about 3%. On Long Island, we’ll like see the annual appreciation from 2024 to 2025 climb even higher, especially if buyer demand is as strong as predicted. Since 2019, the median home sale price has grown nationwide by 32%! If you haven’t checked your home value recently, click here to get a quick estimate on our website.
If you’ve been holding off on buying, hoping to time the market or wait for mortgage interest rates to come down, our advice is to buy now. We don’t see Long Island home prices dropping anytime soon and with mortgage rates not predicted to mellow substantially in 2025, buying a home now means you may be able to secure your dream property at a lower price than if you had kept waiting.
Ready to get started on your real estate goals for 2025? As a top real estate team on Long Island, we are here to help you sell, buy, and invest with confidence. Contact us now and let’s get you set up for success in the New Year!
The Pesce & Lanzillotta Team, at BHHS Laffey International Realty
Office: 516-888-9711
Email: info@pl-team.com
