
Rick Seese has nearly 50 years experience working in real estate market, and each month, he shares the latest news and outlook for Lowell-area housing market.
January 2025 Edition
-Year-End News and 2025 Trends
-The Latest Area Market Statistics
-Monthly Recap – Looking Ahead
Year-End News and 2025 Trends
Inflation and Mortgage Rates
Inflation concerns eased slightly last week as comments from the Federal Reserve (FED) raised hopes for additional interest rate cuts this year. December’s Consumer Price Index (CPI) increased by 0.4% month-over-month and 2.9% year-over-year. While this tempered fears of a resurgence in inflation, the FED is unlikely to lower rates during its upcoming January meeting. Their 2% annual inflation goal remains intact.
This past Thursday, mortgage rates reached 7% for the first time since May 2024. This rise in rates has persisted despite recent FED rate cuts, which had sparked optimism among potential homebuyers. Why are mortgage rates climbing? It’s important to note that while the FED influences mortgage rates, it doesn’t directly set them. The FED adjusts short-term interest rates, but mortgage rates are primarily tied to longer-term Treasury bond yields. These yields have risen significantly due to several factors:
- Persistently High Inflation: Inflation remains slightly elevated, leading the FED to approach rate cuts with caution.
- A Robust Economy: The strong economic performance allows the FED to delay further cuts, as a thriving economy can contribute to inflationary pressures.
While a 7% mortgage rate may feel high, it’s worth noting that rates were commonly in the 6%-7% range or higher during the 1990s and early 2000s and even reached double digits in the 1970s and 1980s. Although this historical perspective might not ease the concerns of today’s homebuyers, rates are expected to hover around 6% over the next couple of years.
2025 Trends
With a stronger economy, homeowners who have built significant real estate equity may finally decide to move, potentially helping to alleviate the ongoing inventory challenges. Here are four emerging homebuyer trends for 2025, as reported by the National Association of REALTORS® (NAR) via RISMedia:
1. More Buyers Paying Cash
Thanks to substantial equity gains, many homeowners may choose to purchase their next home without taking on a mortgage. Over the past year, 26% of all home sales were all-cash transactions, and 31% of repeat buyers opted to pay cash for their next property.
2. Aging First-Time Buyers
Rising home prices have led many individuals to save longer before buying a home. The median age of first-time homebuyers reached an all-time high of 38 in 2024, according to NAR. Additionally, 25% of first-time buyers relied on financial gifts or loans from family or friends, while 20% tapped into investments like stocks or retirement accounts to achieve homeownership.
3. Increased Multigenerational Living
The percentage of multigenerational households hit a record 17% last year, driven primarily by cost savings. According to NAR, other reasons include caring for aging parents or accommodating young adults returning home.
4. More Single Women Buyers
With declining marriage rates, more consumers are entering the housing market independently. Single women represented 24% of home purchases last year, compared to just 11% for single men. Additionally, many married couples have delayed having children, which has pushed homebuying later into their lives.
Local Trends and Year-End Highlights
As national trends influence the 2025 housing market, local school districts within our focus area demonstrated strong real estate performances in 2024. Check out the year-end totals below for insights and comparisons within our local market.
The year ahead brings both challenges and opportunities. Staying informed, especially as we anticipate potential policy changes under the new administration, will empower homeowners and buyers to navigate 2025 with greater confidence.
We are comparing the current 12-Month Rolling Average Sale Prices with the final 2023 Average Sale Prices within our surrounding focus area school districts. All our focus areas have higher Average Sale Prices compared to 2023 ending prices, except Saranac. All our focus areas have higher Average Sale Prices from last month, except Forest Hills, Caledonia and Saranac.
The largest year-over-year Final Average Sale Price increases for 2024 are:
- Lowell (9.7%)
- Forest Hills (8.3%)
- Belding (7.4%)
- Rockford (6.4%)
- Caledonia (4.5%)
The Lowell School District average sale price increased $45,791 in 2024. The final Average Sale Price for the Entire MLS (GRAR) in 2024 was $366,945.
Pending Sales are sales under contract with an accepted offer, but those transactions have not been finalized yet (closed). Pending Sales numbers helps us predict future trends for closings which become actual Sale Price data.
Only Forest Hills experienced a year-over-year Pending Sales decrease. All other school districts had increases. From last month, only Lowell had an increase in Pending Sales, with all other focus areas registering decreases or remaining the same. The Entire MLS (GRAR) had a decrease in Pending Sales from last month, as well as a decrease year-over-year from December 2023.
January 2025 Monthly Summary
Looking Ahead
In 2025, the U.S. real estate market is expected to experience moderate growth, with home sales projected to rise by approximately 9% and home prices increasing by around 2%. Mortgage rates are anticipated to stabilize between 6% and 6.5%, enhancing affordability for buyers and supporting overall market activity.
In West Michigan, the housing market is positioned for a significant expansion. The National Association of Realtors has ranked the Grand Rapids area among the top ten housing markets for 2025, highlighting its affordable inventory and favorable conditions for homebuyers. This recognition reflects the region’s continued appeal to both buyers and investors, building on its strong performance over recent years.
The Lowell School District real estate market ended 2024 on a high note, outperforming many neighboring school districts with above-average sale price growth and strong buyer demand. Lowell’s success can be attributed to its high-quality schools, vibrant community atmosphere, and strategic geographic location with excellent accessibility, making it a sought-after area for homebuyers.
Rick Seese works with buyers and sellers of residential, commercial, and industrial real estate. He is an Associate Broker with Greenridge Realty, Inc. and has been licensed full-time for over 40 years. If you’re interested in reaching out to Rick for more information, or have a question for the monthly article, you can contact him via email ([email protected]), visit his website at www.rickseese.com or Facebook page or call/text him at 616-437-2576.
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