According to the Realtor.com® January 2025 housing data, more homes are being newly listed on the market despite higher mortgage rates seen in recent months. Time and natural turnover could be leading some sellers to make a move this year despite higher rates. Meanwhile, listing prices continue to grow, although more small homes available means the nation’s median list price is lower than last year. Finally, there seems to be a Trump Bump in the DC area as people in the new administration are buying large homes.
Sellers Inch Back Into the Market This January
The January 2025 Market Trends tell us that inventory is increasing! There were 24.6% more homes actively for sale on a typical day in January compared with the same time in 2024, marking the 15th consecutive month of annual inventory growth. However, this is an increase from December, which was up only 22.0% year-over-year and marked a departure from five straight months of slowing growth. While inventory this January certainly continues to improve, it is still down 24.8% compared with typical 2017 to 2019 levels.
The total number of homes for sale, including homes that were under contract but not yet sold, increased by 17.1% compared with last year, growing on an annual basis for the 14th month in a row. This is down slightly from 17.5% last month. The number of homes under contract but not yet sold (pending listings) continued to rebound in January, increasing by 1.8% compared to last year, but it is much less than December’s 7.4% gain. This slowdown is at least partially due to mortgage rates in January that were on average 25 basis points higher than in December. Though rates are significantly higher today than they were just a few months as the Realtor.com 2025 forecast shows that as both lower rates and time chisel away at the “lock-in” effect that has held back sales this year, we should expect home sales to rise modestly by 1.5% in 2025.
Sellers are finally putting their homes on the market this January. According to the January 2025 Market Trendsn, Newly listed homes were 10.8% above last year’s levels, an increase from December’s small rise of 0.9%. This puts new listing activity at its highest January level since 2021. While rates remain elevated, it is possible that sellers may finally be growing tired of waiting for significant changes in rates. Further, while the lock-in effect remains a factor for many sellers, the strength of the effect is gradually waning. Realtor.com analysis shows that among homeowners with a mortgage, the share with a rate under 6% fell to 83%, down from 88% one year prior, and the Realtor.com 2025 Housing Forecast anticipates additional declines to 75% by the end of 2025 as life and moves must continue for some homeowners.
Newly listed home inventory increased in all regions. The West saw the largest growth in new listings, by 21.7% compared with last year, whereas they grew by 10.7% in the Midwest, 10.6% in the South, and 4.5% in the Northeast The gap in newly listed homes compared with pre-pandemic 2017 to 2019 levels was lowest in the South, where newly listed homes were just 8.1% below pre-pandemic levels. In comparison, they were down 14.1% in the West, 23.3% in the Midwest, and 34.3% in the Northeast.
In the DC metro area, inventory was 7364 at the end of December 2024 (the last time data is available) versus the five-year average of 6638 listings. In Washington DC there were 1924 homes on the market at the end of 2024 versus the five-year average of 1542. Listings were still down in Bethesda – 73 at the end of 2024 versus the five-year average of 93. In Arlington County, listings are also still tight. There were 211 listings on the market versus the five-year average of 266. If you are curious how your home value compares with other homes on the market, just click here to find out.
January 2025 Market Trends Indicates Increased Time on Market
The typical home spent 73 days on the market this January, which is five more days than the same time last year and three more days than last month. This marks the slowest January since 2020, marking the 10th month in a row where homes spent more time on the market compared with the previous year. However, the time a typical home spends on the market is still 11 days less than the average January from 2017 to 2019. The January 2025 Housing Market trends across the nation show that in the South and West, where the growth in home inventory has been the largest, the typical home spent 6 and 5 more days on the market, respectively, compared with last year. However, in the Midwest homes are spending just two days longer on the market compared with the same time last year and in the Northeast homes are not moving any slower or faster than last year.
The average days on market for the mid-Atlantic area in December (the most recent data available) was 34, up from the five year average of 30 days. The average days on market for the DC metro area was 32 days versus the five year average of 27 days. Washington DC saw an average days on market of 59 days versus the five year average of 41 days. Bethesda had an average days on market of 31 versus a five year average of 29 days. Interestingly in Arlington County the number of days on market is 33 days in contrast with the five year average of 35!
January 2025 Market Trends Show Listing Prices up But…
The national median list price in January was $400,500, which is about $2,000 lower than last month and 2.2% lower than last January. However, when a change in the mix of inventory toward smaller homes is accounted for, the typical home listed this year has increased in asking price compared with last year. The median listing price per square foot increased by 1.2% in January compared with the same time last year. Moreover, the typical listed home price has grown by 38.4% compared with January 2019, while the price per square foot grew by 54.9%.
The share of homes with price reductions during January was up 0.9 percentage points from last year, at 15.6%. What’s more, the overall share of inventory with price cuts was higher than any January in our records other than in 2023, when rising rates began to slow the market, and in 2019, when the market was also softer due to relatively higher rates at the time. This high share of price reductions could signal further price softening in the coming months. Interested in more details about the January 2025 housing market? Just click here.
Are You in the Market to Buy or Sell?
The only story that matters is your story – and you probably only care about the statistics that show how you will fare in this real estate market. If you are thinking about buying or selling in this market, then we should talk about your plans, your goals, your dreams. You can reach me at 240-401-5577 or email me at lise@lisehowe.com. Let’s talk!
