Market Survey: Waiting on the Market to Change

Tepid Expectations to Start the Year

New year, new opportunities. While optimism for buyer activity increased in January, at 63.6 according to the Bright MLS subscriber survey, sentiment isn’t as high as it was last year at this time. The Bright MLS indices are calculated by comparing the number of agents and brokers who anticipate high to very high activity in the coming three months to the number expecting low to very low activity to gauge expectations. An index above 50 indicates optimism about market conditions.
 

 

Despite the Federal Reserve’s rate cut in December, mortgage rates moved higher. Mortgage rates are now above 7%, the highest level since July. Persistently elevated mortgage rates have tempered expectations for the early 2025 housing market.

The seller outlook slipped slightly from December but is over five points higher than a year ago. An increase in new listing activity in 2024 explains some of agents’ growing optimism. Changing family and financial circumstances will likely motivate sellers in 2025.

More Inventory Can Move the Needle

More homes on the market would be a welcome change for buyers. While inventory was up 11.7% year-over-year at the end of December 2024, buyers still faced a lot of competition. Sellers who closed in December received an average of 2.5 offers, compared to 2.6 in December 2023.

There are signs that it might be starting to get a little easier for buyers as inventory continues to rise. In December 2024, 16.1% of agents working with a buyer said that it was somewhat or very difficult to submit a successful offer, compared to 20.5% in December 2023. Finding the right home also proved less of a struggle, with 31.8% of buyers’ agents reporting it was somewhat or very difficult in December 2024 compared to 37.4% in December 2023.

Buyers will start to have more leverage in 2025, but compromise is the path forward for the market. In December, 36.3% of agents working with a successful buyer stated their buyers had to make some type of compromise, whether that was accepting the home as-is, offering above list price, or purchasing a smaller home Sellers are also increasingly willing to compromise, with 39.5% of agents reporting their sellers offering credit for repairs and 30.7% offering closing cost assistance.
 

 

Other Findings

• One in five sellers who did not purchase another home moved in with family/relatives.
• Of agents and brokers working with multiple clients, around two-thirds had a buyer pause or stop their home search.
  • Top of mind for potential buyers hesitating are mortgage rates, high home prices, and the struggle to find the right home. Though always at the forefront, mortgage rate trends have caused this concern to creep back up to the top spot.
• New buyers continue to join the market, with nearly two in five searching for their home for two months or less before purchasing: 18.4% searched for under a month and 26.5% searched for one to two months.
• Roughly one-third of those working with sellers had a client pause or stop.
• Those who do list are likely to get the price they were hoping for, with three-quarters stating so in December 2024.

About Bright

Bright is proud to be the source of truth for comprehensive real estate data in the Mid-Atlantic, with market intelligence currently covering six states (Delaware, Maryland, New Jersey, Pennsylvania, Virginia, West Virginia) and the District of Columbia. Bright MLS’s innovative tool library—both created and curated—provides services and award-winning support to well over 100k real estate professionals, enabling their delivery on the promise of home to over half a million homebuyers and sellers monthly. In 2024, Bright subscribers facilitated $112B in real estate transactions through the company’s platform.

A total of 862 agents representing recent homebuyers and 981 agents representing recent home sellers responded to Bright MLS’s survey. The survey was conducted between January 6 and January 13, 2024. Full survey results are available here. More research and analysis on the housing market is available from Bright Research.