European Stocks Rise as Markets Await Key U.S. Inflation Data 
Germany’s Economic Recovery Slows as Trade Tensions and Rising Costs Weigh on Growth 
Dollar Holds Steady as Markets Shift Focus to 2026 Rate Cut Expectations 
Citi Sets Bullish 2026 Target for STOXX 600 as Fiscal Support and Monetary Easing Boost Outlook 
BOJ Governor Ueda Highlights Uncertainty Over Future Interest Rate Hikes 
Spain’s Industrial Output Records Steady Growth in October Amid Revised September Figures 
Gold Prices Edge Higher as Markets Await Key U.S. PCE Inflation Data 
Europe Confronts Rising Competitive Pressure as China Accelerates Export-Led Growth 
Dollar Slides to Five-Week Low as Asian Stocks Struggle and Markets Bet on Fed Rate Cut 
IMF Deputy Dan Katz Visits China as Key Economic Review Nears 
China Urged to Prioritize Economy Over Territorial Ambitions, Says Taiwan’s President Lai 
Asia’s IPO Market Set for Strong Growth as China and India Drive Investor Diversification 
Japan’s Nikkei Drops as Markets Await Key U.S. Inflation Data 
Asian Currencies Steady as Rupee Hits Record Low Amid Fed Rate Cut Bets 
Gold Prices Steady as Markets Await Key U.S. Data and Expected Fed Rate Cut 
Oil Prices Rise as Ukraine Targets Russian Energy Infrastructure 
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.
