FMLS Market Intel Report – First Quarter 2025
Presented by: Leslie Appleton-Young, Chief Economist, FMLS
As we move through the first quarter of 2025, it’s clear that the housing market continues to face
challenges. A few months ago, forecasts for the year ahead were more optimistic, but those
expectations have since been adjusted downward due to several persistent factors. Higher
mortgage rates, rising home prices, and growing uncertainty surrounding future inflation are all
contributing to a two-year-long slowdown in the housing market.
National Market Overview
The National Association of Realtors (NAR) reported that January 2025 sales were up 2%
compared to January 2024, although they showed a 4.9% drop from December 2024. This
decline was nearly double what analysts had anticipated.
The national median sales price reached $396,900 in January, marking a 4.8% increase year-
over-year. This represents the 19th consecutive month of price growth. However, it’s worth
noting that while home prices are still rising, the inventory of unsold homes has also increased.
As of January, there were 1.18 million unsold homes, representing a 3.5% increase from
December. The total supply equates to approximately 3.5 months of inventory, indicating
sluggish sales combined with rising prices and an increase in available homes.
While higher inventory levels typically lead to more competition among buyers, today’s market
remains stymied by the overall high cost of purchasing a home. As mortgage rates remain
elevated, many buyers are unable to fully capitalize on the increase in inventory.
Greater Atlanta Area Market Overview
Turning to the Greater Atlanta Area, we see a similar trend.
- Closed sales: There were 2,319 closed sales in January 2025, a 1.1% decrease
compared to January 2024. - Median sales price: The median sales price reached $420,000, representing a 1.2%
increase year-over-year and marking an all-time high for any January. - Days on market: Homes are staying on the market longer. The average days on market
increased by 33%, from 24 days in January 2024 to 32 days in January 2025. - Inventory levels: Inventory in the Greater Atlanta Area rose by 43.8%, with 10,926
homes for sale, compared to January 2024.
As inventory continues to rise and homes take longer to sell, the sales price as a percentage of
the list price has slowly declined. Since July 2024, this figure has been gradually falling, and it
now stands at 98.9% for the Greater Atlanta Area. A notable trend reported by Altos Research
in February showed that 33% of homes on the market nationwide have experienced price
reductions.
Woodstock Ga Real Estate Market February 2025
- Median Home Price: Reached $474,978, reflecting a 7.6% increase compared to the previous year.
- Market Conditions: The area moved into a neutral market, indicating a more balanced dynamic between buyers and sellers.
- Homes Sold: A total of 91 homes changed hands, up 13.8% from January 2025.
- Average Time on Market: Properties spent an average of 51 days on the market, a 45.9% increase from February 2024.
Implications for Sellers
With more inventory available and homes staying on the market longer, sellers are facing
increased competition. Realistic pricing is crucial in today’s market, as “testing the waters” with
an overpriced listing is no longer a viable strategy, especially when buyers have a greater
selection of properties to choose from. Additionally, affordable housing remains at a premium,
making smaller homes, townhomes, and properties further away from job centers more
attractive to potential buyers.
Consumer Confidence and Economic Outlook
Shifting gears, let’s discuss consumer sentiment. The current economic uncertainty surrounding
inflation and mortgage rates is affecting future buyers and sellers. Mortgage rates have
remained relatively stable for the past five weeks, staying just below 7% with fluctuations of less
than 20 basis points. However, uncertainty still looms, and future rate hikes are a possibility.
In February 2025, the University of Michigan’s Consumer Sentiment Index dropped by 10%,
marking its second consecutive decline. A significant part of this decline stems from concerns
over future price increases, partly due to anticipated tariffs. As a result, expectations for inflation
surged by 1%, reaching 4.3%, the highest level since November 2023. This shift in sentiment
suggests that forecasts for mortgage rates around 6% may be overly optimistic.
Conclusion
As the market adjusts to rising mortgage rates, home prices, and inflation concerns, the
dynamics of both national and local housing markets continue to evolve. The current outlook
indicates a more challenging environment for both buyers and sellers, with realistic pricing and a focus on affordability becoming increasingly important.
For more up-to-date market data and resources, visit the FMLS website, where market statistics
are updated weekly.