Singapore GDP Growth Surges in 2025 but Outlook Remains Cautious Amid Global Trade Risks 
Oil Prices Slide in 2025 as Oversupply and Geopolitical Risks Shape Market Outlook 
Oil Prices Slip Slightly as Markets Weigh Geopolitical Risks and Supply Glut Concerns 
China Manufacturing PMI Rebounds in December, Offering Boost to Economic Growth Outlook 
Japanese Business Leaders Urge Government Action as Weak Yen Strains Economy 
U.S. Dollar Steadies Ahead of Fed Minutes as Markets Eye Policy Divisions 
Trump Delays Tariff Increases on Furniture and Cabinets for One More Year 
Asian Markets Slip as Precious Metals Cool, Geopolitical Tensions Weigh on Sentiment 
Citi Forecasts a Volatile but Ongoing Bull Market for S&P 500 in 2026 
South Korean Won Slides Despite Government Efforts to Stabilize Currency Markets 
South Korea Inflation Rises to 2.3% in December, Matching Market Expectations 
U.S. Stock Futures Slip as Year-End Trading Turns Cautious 
South Korea Factory Activity Returns to Growth in December on Export Rebound 
South Korea Exports Hit Record High as Global Trade Momentum Builds 
U.S. Stock Index Futures Steady as Markets Await Fed Policy Clues in Holiday-Thinned Trade 
Forex Markets Hold Steady as Traders Await Fed Minutes Amid Thin Year-End Volumes 
Asia Manufacturing PMI Rebounds as Exports and Tech Demand Drive Growth into 2026 
The U.S. housing market in 2025 offers cautious optimism, with Bank of America predicting better supply and steady mortgage rates. However, affordability and inventory shortages are expected to limit the pace of recovery, keeping many buyers and sellers on the sidelines.
2025 Housing Market: Challenges and Mild Improvements Ahead
While a survey by Bank of America predicts a slight uptick in activity in the US home market in 2025, it also notes that high mortgage rates and affordability issues would keep things slow.
After dropping from their all-time high of 8% last year to 6% earlier this year, mortgage rates have since recovered and are back at 7%. In 2025, rates are expected to stay in the 6-6.5% range, according to BofA analysts. This will keep the "lock-in effect" going strong, since homeowners with low rates are hesitant to sell, Investing.com shares
Cost is still a major issue. Median home prices are about four times the median income, which has led to a persistent lack of affordability, even if there has been some progress since 2022. In the United States, a single-family home could be purchased for as little as $412,000 in October, while the median income was $102,000.
Improved Housing Supply Faces New Constraints
As a result of fewer delays and more completed projects, the report states that supply has improved. Nevertheless, builders are faced with constraints caused by high mortgage rates and expenses, and the inventory of existing homes is at an all-time low.
The market may find support from persistent demand for housing and from slow but steady income growth. In 2025, if mortgage rates remain stable, according to BofA, existing home sales will reach about 4.2 million. Although renting is still less expensive in 82 out of 97 large U.S. cities, the ratio of mortgage payments to rent has decreased, indicating better conditions in some areas.
Affordability Likely to Improve Gradually
As long as salaries continue to outperform inflation and interest rates stabilise, affordability should gradually return to levels experienced in the early 2000s. However, high mortgage rates will continue to be a barrier for both buyers and sellers, thus BofA warns that the recovery will be slow.
