SitusAMC White Paper Offers 2025 Residential Forecast and Analysis of Political Policy

Macro economic factors appear to support a continuation of the stabilization that began last year in residential real estate. However, a new set of uncertainties has emerged as the presidential administration attempts bold policy changes. In a new white paper, “Residential Real Estate in 2025: Can the Transition to Stability Continue?” SitusAMC provides forecasts for economic growth, interest rates, inflation and the labor market, and reviews recent policy actions and proposals, with analysis of the implications for housing and housing finance. Download the paper here. 

“With a stable economy and labor market, cooling inflation and stabilizing interest rates, mortgage rates should trend flat-to-down in 2025,” said Peter Muoio, Senior Director and Head of SitusAMC Insights.  

SitusAMC Insights expects gross domestic product (GDP) to increase 2.2% at an annual rate, cooling slightly from last year. Unemployment should remain low, inflation continue to hover above the Fed’s 2% target and interest rates decline slightly. 

“Interest rates are projected to decrease in 2025, but remain elevated,” Muoio said. “As a result, the outlook for residential real estate is tempered, with originations, securitizations and debt outstanding expected to grow, but remain below long-term trends.” 

Meanwhile, home sales are expected to grow slightly in 2025, but limited inventory will continue to plague housing market activity. SitusAMC expects minor growth of 0.3% for both new and existing homes combined. 

In addition, with a new U.S. administration, significant policy uncertainty and ongoing geopolitical turmoil, housing and housing finance in 2025 could be sideswiped by policy-driven developments, the paper states. The white paper delves into the potential effects of administration policies related to the future of Fannie Mae and Freddie Mac, immigration, reduced federal spending and tariffs, with a deep dive into their economic, labor and real estate implications. 

“Specifics about these policies are constantly changing with many unknowns,” said Jen Rasmussen, Vice President and Head of Market Commentary of SitusAMC Insights. “Not only are policy directives quickly evolving, but legal challenges put their implementation in limbo, making it difficult to determine whether existing policies will merely be delayed, or blocked altogether. Even under more certain circumstances, public policies would have complex effects on real estate markets." 

Download the white paper, “Residential Real Estate in 2025: Can the Transition to Stability Continue?” here. For more information on SitusAMC Insight’s research, analytical tools, or data products, visit our website.