According to recent estimates from Zillow, home prices in America increased by approximately +2.6% in the 2024 calendar year. This growth outstripped expectations and showed a surprisingly resilient housing market. While demand was down, and home sales fell to multi-decade lows, prices kept growing in most parts of America due to a persistent lack of housing inventory.
However, Reventure App expects this price growth to slow in 2025, with more inventory hitting the market and more sellers willing to reduce list prices. The result will be the lowest annual home price appreciation the US Housing Market has experienced in a decade, with Reventure App’s data suggesting the US Housing Market will only achieve +0.91% growth throughout the 2025 calendar year.
In this post, I will break down the aspects of Reventure App’s price forecast for 2025 and reveal the regional differences that will persist across the US Housing Market, as well as outline some of the upside and downside risks to the forecast. One thing is nearly certain – 2025 will continue to be a bifurcated market. With large variations in home price growth across the US depending on local market dynamics. Reventure App expects home values to go up steadily in much of the Midwest and Northeast, while prices are expected to fall throughout the South. These regional differences will create a “tale of two housing markets” in 2025 and make understanding the local data in your market more important than ever.
Understanding 2024’s home price growth and how it will shift into 2025
2024 proved to be a year where the US Housing Market significantly outperformed expectations in terms of appreciation. While home sales registered their worst year since the 1990s, home prices didn’t follow suit. They continued to grow across America at +2.6% due to inventory levels which were still historically low. The long-term 10-year median for home price appreciation is 6.1%.
Back in November 2023, there were approximately 755,000 re-sale listings on the US Housing Market according to data from Realtor.com. This level was about -17% below the long-term average for November, contributing to a persistent shortage across much of the US entering the 2024 calendar year. This shortage resulted in elevated home price growth levels in the first half of the year, particularly in the Northeast and Midwest.
However, fast forward to November 2024, and active listings have increased to 953,000. While this level of active listings on the resale market is not quite back to pre-pandemic levels, it is now above the long-term average for November by about +4.5%. This means that the US Housing Market, on a national basis, is now fairly supplied with homes relative to the current demand levels and that there is no longer a national housing shortage. The result will be slower home price growth in 2025.
The other data point that suggests a slowdown in the 2025 housing market is the Days on the Market for listed houses. The long-term average for Days on the Market in November is 59 Days according to data from Realtor.com. Back in November 2023 the US Housing Market was below this level, at 52 days, which contributed to the better than expected home price growth through the end of 2024.
However, fast forward to November 2024, and Days on Market have spiked to 62 days, meaning homes are taking 17% longer to sell at the end of 2024 than the previous year. As a result, more sellers are beginning to experience fatigue as their homes sit on the market for longer. This increased seller fatigue makes it more likely that price growth will slow into 2025.
Establishing a 2025 Housing Market Projection by State using Reventure’s Price Forecast Score
Reventure App features a Home Price Forecast Score for every ZIP Code, County, and City across America. This score is ranked from 0 to 100 and attempts to forecast the future direction of home prices based on the prevailing trends in the market today. Below 50 indicates a declining market, and above 50 indicates a growing market.
The score has 5 key components: Inventory, Days on Market, Price Cuts, Recent Appreciation, and Mortgage Rates. These components combine to give a supply/demand indication of the market, which Reventure has found to have strong predictive power for the future short-term direction of prices.
You can see that Reventure is forecasting continued Home Price Growth across much of the Northeast and Midwest (red areas on the map), with the highest scores in states like Connecticut (64/100) and New Jersey (63/100), where a persistent inventory shortage is causing continued price growth. Don’t be surprised if home values grow by as much as 10% in these areas in 2025. Meanwhile, home prices are forecast to decline in markets like Texas (41/100) and Florida (39/100), where inventory and DOM have spiked to the highest levels in a decade. Home values could fall as much as 5% in these areas.
Regional Performance of the Home Price Forecast in 2024
Reventure’s Home Price Forecast performed very well in 2024, predicting the growth of home prices from November 2023 to 2024 with a 0.74 correlation coefficient among metro areas with a minimum population of 100,000.
This high correlation coefficient means that metro areas with lower scores in November 2023 ended up having the lowest home price growth in November 2024, while metros with the highest scores in 2023 had the best price growth in 2024. You can see the line of best fit added to the graph above, with the X-axis showing a metro’s home value growth in November 2024 and the Y-Axis showing the Reventure App Score in November 2023.
This was the best year to date for the Reventure App score performance, and gives us optimism that we will continue to provide solid guidance to homebuyers and investors based on the underlying trends in the market.
Two risks to the Reventure Forecast: 1) Inflation and 2) Foreclosures
One thing to note for readers is that the Reventure Forecast is not a guarantee of the future direction of prices. It is simply a best guess, or estimate, of where values are heading in the future based on the prevailing trends in the market today. Black swan events could occur across the housing market and economy in 2025 that will shift the forecast either up or down, and a result, homebuyers and real estate investors will need to stay vigilant as the year goes on and track the data in their market.
In particular, I’m looking at two potential risks in the Housing Market that could push the price forecast up or down as 2025 progresses.
The first risk is Inflation. Inflation risks in the US and Global Economy appear to be building heading into 2025, with long-term bond yields spiking and core inflation rates beginning to re-acclerate. Historically, higher rates of inflation in the economy are correlated to higher rates of home price growth (see the 100-year graph below, which compares money supply growth to home price growth). 
Current M2 growth is 1.3% YoY for the full year in 2024, but 3.6% YoY through November 2024 YoY. You can see how the historical relationship between M2 Growth and Home Price Growth is very strong. If M2 were to continue to accelerate in 2025, inflation would likely pick up as well – say to 6 to 7% YoY growth – home values could increase more than expected.
The second risk to the Reventure Forecast is a downside risk related to Foreclosures. While the overall foreclosure rate in the US Housing Market is very low heading into 2025 (0.3% of all mortgages in foreclosure), some warning signs are beginning to bubble up in the mortgage market that suggests we could see more distressed selling in 2025. For starters, there are currently over 300,000 backlogged foreclosures in the mortgage market according to the July 2024 Ice Mortgage Monitor. These mortgages are seriously delinquent but blocked from foreclosure due to pandemic-era loss mitigation and forbearance measures. Moreover, early-stage mortgage delinquencies are on the rise, with the delinquency rate on 2024-vintage mortgage originations hitting 1.7% in November, the highest early-stage delinquency rate (6 months after origination) for any vintage since 2008.
So while the health of the existing US mortgage market looks good on the surface, cracks are starting to appear. 2025 could finally be the year when more foreclosures hit the housing market. If that happens, there could be a subsequent rise in inventory and a downward revision in Reventure’s price forecast.
Find the Real Estate Data in your City and ZIP Code
An understanding of the macro-trends in the US Housing Market is very important. However, it’s no substitute for diving into the specifics of your local market and ZIP Code. On Reventure App we make home value, inventory, and demographic data for most ZIP codes in America available for free to our users, with the core mission of broadening everyone’s knowledge of their local housing market.
From there – we make premium data points like our Home Price Forecast and Valuation Rates available for the cost of $39/month so serious homebuyers and investors can gain an even further understanding of the health and dynamics of their local market.
Start using Reventure App by going to www.reventure.app and typing in your ZIP code into the search bar.
I wish you luck in your home search in 2025. It promises to be an exciting year.
-Nick Gerli
CEO of Reventure App
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