Home Price Growth Reaccelerates in Q4: What It Means for Buyers and Sellers in 2025

The latest report from Fannie Mae reveals an important shift in the housing market: home price growth is reaccelerating. After two quarters of slowing growth, single-family home prices nationally increased by 5.8% from Q4 2023 to Q4 2024. This marks a slight uptick from the previous quarter's annual growth rate of 5.4%. On a quarterly basis, prices rose 1.7%, adjusted for seasonality, compared to 1.2% in Q3 2024.

What’s driving this renewed growth? Let’s explore the key factors and what they mean for buyers and sellers in 2025.

The Lock-In Effect and Inventory Challenges

Mark Palim, Fannie Mae’s senior vice president and chief economist, highlights the continued impact of the “lock-in effect.” With mortgage rates inching closer to the 7% threshold, many homeowners are hesitant to sell and give up their existing lower-rate mortgages. While inventories have improved slightly compared to last year, they remain historically low, limiting options for buyers and contributing to price increases.

For sellers, this tight inventory can be an opportunity. If you’re considering listing your home, now may be the time to take advantage of rising prices and limited competition.

Mortgage Rates and Affordability

High mortgage rates are creating a challenging environment for buyers. Affordability has taken a hit, and many potential first-time homebuyers are waiting on the sidelines for rates to decline. A drop in mortgage rates could unlock pent-up demand, but it may also further fuel price growth if supply doesn’t keep pace.

For buyers, preparation is key. Consider getting pre-approved for a mortgage and working with a knowledgeable real estate professional to navigate the competitive market.

Insights for Sarasota's Real Estate Market

As a real estate professional based in Sarasota, Florida, I’ve seen firsthand how national trends like these affect our local market. Sarasota’s appeal as a lifestyle destination, combined with limited inventory, makes it even more critical for buyers and sellers to have expert guidance. Whether you’re planning to buy your dream home or maximize your selling potential, understanding market dynamics is crucial.

Looking Ahead: What to Expect in 2025

The housing market in 2025 faces a delicate balancing act. A significant decline in mortgage rates could ease the inventory crunch and encourage more movement in the market. However, this may also lead to a surge in demand, potentially driving prices even higher.

For those looking to buy or sell this year, staying informed and proactive is essential. Let’s work together to create a strategy that fits your goals in this dynamic market.

Are you thinking about buying or selling a home in Sarasota? Contact me today to discuss how these trends may affect your plans and how we can make the most of the opportunities ahead.