We’re already well into 2025, and the U.S. real estate market is full of emerging trends and challenges. Understanding these dynamics is essential for corporate relocation professionals to assist relocating employees effectively. This forecast explores national and regional real estate conditions, analyzing market trends, inventory levels, days on market, existing home sales, new construction, mortgage rates, and the effects of the Trump administration’s policies on these factors.
National Real Estate Market Overview
Market Conditions and Home Prices
The U.S. housing market is anticipated to experience moderate growth in 2025. According to the National Association of Realtors (NAR), existing home prices are projected to increase by 1.8% in 2025 and 2.3% in 2026. Similarly, Fannie Mae forecasts a 3.5% year-over-year rise in home prices for 2025, followed by a 1.7% increase in 2026. These projections suggest a stabilization in home price appreciation compared to the rapid surges witnessed in previous years.
Inventory Levels and Days on Market
Inventory shortages have been a persistent issue in the U.S. housing market. A recent analysis by Zillow indicates that the nation is short by approximately 4.5 million homes to achieve a balanced supply. However, there are signs of improvement. The inventory of existing homes has been trending upward, and mortgage rates are expected to decline modestly in 2025. This increase in inventory is expected to extend the median days on market, providing buyers with more options and reducing the urgency that characterized previous years.
Mortgage Rates
Mortgage rates have been a focal point for both buyers and relocation professionals. After peaking at 7.79% in October 2023, the average rate for a 30-year fixed-rate mortgage began February 2025 at 6.89%. The Mortgage Bankers Association projects that these rates will stabilize around 6.5% for the foreseeable future. While this stabilization offers some predictability, rates remain elevated compared to the historically low levels of the early 2020s, impacting affordability for many buyers.
Regional Real Estate Variations
Regional Real Estate Market Breakdown
While national trends provide a useful big-picture view, real estate market conditions vary significantly by region. Let’s take a closer look at what’s happening in major regions of the U.S. and how these trends impact corporate relocations.
The Midwest: A Steady and Affordable Alternative
The Midwest has long been known for its affordable housing and stable real estate markets, and 2025 is no exception. Cities like Chicago, Minneapolis, Columbus, and Kansas City remain attractive for employees relocating from high-cost areas.
- Inventory and Pricing: Unlike the coastal markets, home prices in the Midwest have increased at a slower pace, making housing more affordable. The median home price in many Midwestern metro areas remains under $350,000, a stark contrast to the $800,000+ median in California or the Northeast.
- Days on Market: Homes in the Midwest tend to stay on the market longer than in higher-demand regions, giving buyers more time to make decisions.
- Challenges for Relocation: While affordability is a strong selling point, economic volatility in manufacturing-heavy areas and fluctuating job growth could impact relocation trends.
Impact on Relocating Employees: Employees relocating to the Midwest can expect a stable housing market with relatively reasonable prices and less competition, making it easier to find suitable housing without bidding wars.
The Southeast: A Mixed Bag of Growth and Affordability
The Southeast, including Florida, Georgia, North Carolina, Tennessee, and South Carolina, has been one of the fastest-growing regions in the U.S. due to business-friendly policies, job growth, and relatively lower costs of living. However, real estate conditions vary widely across the region.
- Inventory and Pricing: Major cities like Atlanta, Nashville, Charlotte, and Raleigh are experiencing inventory constraints, leading to competitive markets. Home prices in these areas have grown rapidly but remain more affordable than the Northeast and West Coast.
- New Construction: Florida, Texas, and the Carolinas continue to see significant new home construction, which helps offset demand. Developers are also offering incentives such as mortgage rate buydowns and closing cost assistance.
- Insurance and Climate Risks: In coastal states like Florida and South Carolina, rising home insurance costs and climate risks (hurricanes, flooding) are major concerns. These factors can impact affordability and make some locations less attractive for relocating employees.
Impact on Relocating Employees: Employees moving to high-growth cities like Nashville or Charlotte may face competitive bidding and affordability concerns, but strong job markets make these cities attractive.
The Mountain West: Cooling After a Hot Market
During the pandemic, cities in the Mountain West—Denver, Salt Lake City, Boise, and Las Vegas—experienced massive real estate booms, driven by remote workers leaving high-cost states. However, the market is cooling in 2025 as mortgage rates dampen demand and inventory rises.
- Inventory and Pricing: These cities saw double-digit price increases between 2020-2022, but growth has slowed. In particular, Boise and Salt Lake City are now experiencing price corrections, with homes sitting on the market longer.
- New Construction: Builders overproduced during the pandemic boom, leading to an oversupply in some areas. This gives buyers more negotiating power.
- Rental Market: Rising home prices have pushed many would-be buyers into the rental market, increasing competition for rental properties.
Impact on Relocating Employees: Employees moving to Denver, Boise, or Salt Lake City in 2025 may find better buying opportunities than in the last few years.
The Southwest: A Balanced Market with Strong Job Growth
The Southwest—Arizona, Nevada, and parts of Texas—has historically been an affordable alternative to California, attracting relocating employees from high-tax states. While markets like Phoenix, Dallas, and Las Vegas overheated during the pandemic, 2025 presents a more balanced environment.
- Inventory & Pricing: Home price growth has slowed, and some cities, like Austin, are experiencing price drops after peaking in 2021-2022.
- Days on Market: Homes are taking longer to sell, giving buyers more leverage.
- Employment Trends: Cities like Dallas, Phoenix, and Houston continue to see strong job growth in tech, healthcare, and manufacturing, making them attractive destinations for corporate relocations.
Impact on Relocating Employees: Employees moving to Texas or Arizona may find better home-buying opportunities compared to 2021-2023. However, markedly higher property taxes in some areas might impact affordability.
The Pacific Northwest: High Prices with Slower Growth
The Pacific Northwest, including Seattle and Portland, has been a high-demand housing market for years. However, affordability remains a challenge.
- Inventory & Pricing: Home prices remain high, though price appreciation has slowed.
- Mortgage Rates & Market Conditions: Rising mortgage rates have reduced buyer demand, increasing days on market.
- Tech Sector Impact: Tech layoffs and the shift to remote/hybrid work models have dampened real estate activity.
Impact on Relocating Employees: Employees relocating to Seattle or Portland should expect high housing costs and limited inventory. Employers might need to consider benefits like cost-of-living adjustments and mortgage assistance.
Existing Homes vs. New Construction
Existing Home Sales
Existing home sales are expected to see modest improvements in 2025. The inventory of existing homes has been trending upward, and mortgage rates are expected to decline modestly in 2025. However, sales volumes are projected to remain below historical norms, influenced by factors such as the “mortgage lock-in” effect, where homeowners with low-rate mortgages are disincentivized from selling.
New Construction
The new-home market is poised for growth, particularly in regions like the Sun Belt. Homebuilders are adapting to market conditions by offering incentives such as mortgage rate buydowns and price reductions to attract buyers. The National Association of Home Builders reports that 31% of builders reduced home prices in December 2024, with an average reduction of 5%, and 60% offered sales incentives. This strategic flexibility positions new construction as a viable option for buyers, especially in markets with limited existing-home inventory.
Impact of the Trump Administration’s Policies
Trade Tariffs and Construction Costs
The Trump administration’s implementation of tariffs on imports from Mexico, Canada, and China will likely significantly affect construction costs. Essential materials like softwood lumber, steel, aluminum, and gypsum are subject to these tariffs, potentially increasing home prices by $7,500 to $10,000 per unit. This cost escalation poses challenges for builders and buyers, particularly in regions like Texas, where the housing shortage is pronounced.
Affordable Housing Initiatives
The administration’s decision to halt a $1 billion program aimed at preserving affordable housing for low-income Americans threatens the stability of affordable housing projects. This move affects numerous projects and residents, potentially leading to increased homelessness and reduced availability of affordable housing options. Organizations are now seeking alternative funding sources to continue these essential projects.
Mortgage Rates and Market Stability
Financial market turmoil, influenced in part by tariff policies, has led to falling mortgage rates, providing a rare advantage for homebuyers. The 30-year fixed mortgage rate dropped to 6.6% from a peak of 7% in January, while the 15-year fixed rate fell to 5.7% from 6.2%. These declines have spurred a rise in mortgage applications and refinancing activity, indicating a more buyer-friendly market.
Implications for Relocating Employees
Affordability Challenges
Relocating employees may face affordability challenges due to elevated home prices and mortgage rates. While some regions offer more favorable conditions, the overall market requires careful financial planning and consideration of housing costs relative to compensation packages.
Increased Negotiation Leverage
The cooling of some markets provides relocating employees with increased negotiation leverage. Extended days on market and rising inventory levels create opportunities to secure favorable terms, making it essential for employees to work closely with real estate professionals to capitalize on these conditions.
Regional Market Dynamics
Understanding regional market dynamics is crucial for successful relocations. Employees moving to high-demand areas like the Northeast and California may encounter competitive markets with limited inventory, necessitating swift decision-making and flexibility. Conversely, those relocating to the South and Mountain West may benefit from more balanced markets with greater availability and negotiable pricing.
Policy Impacts on Housing Availability
The administration’s policies, particularly regarding tariffs and affordable housing funding, directly affect housing availability and affordability. Relocating employees should stay informed about these developments, as they can influence the cost and availability of suitable housing options in various regions.
Key Takeaways for Corporate Relocation Professionals
For corporate relocation professionals, the evolving relocation real estate market requires proactive planning and adaptability. Here are some key considerations to keep in mind:
- Offer Financial Support Where Necessary
Given the persistent affordability challenges in high-cost markets, companies may need to consider enhanced relocation benefits such as:
- Cost-of-living adjustments for employees moving to expensive housing markets.
- Mortgage rate buydowns or temporary housing assistance to alleviate financial pressure.
- Increased home sale assistance to help relocating employees sell their existing homes faster.
Relocation professionals should collaborate with financial advisors and real estate experts to structure competitive relocation packages that align with current market conditions.
- Prioritize Market Research for Strategic Relocations
Different regions are experiencing different real estate trends. High-demand areas like California and the Northeast will continue to see tight inventory and competitive bidding, while the South and Mountain West offer more balanced opportunities for buyers. Understanding these variations will allow relocation teams to provide better guidance to employees regarding housing search strategies, cost expectations, and timing considerations.
For example:
- In high-demand markets, employees should be prepared for quick decision-making and may need temporary housing to bridge the gap between arrival and securing a home.
- In slower-moving markets, employees have more room to negotiate pricing and terms, making it easier to secure favorable deals.
- Encourage Pre-Relocation Home Search Assistance
With the real estate market showing signs of stabilization but still presenting affordability challenges, early planning is key. Encouraging employees to start their home search well before their relocation date can help them:
- Get a sense of available inventory and pricing.
- Lock in mortgage rates before potential increases.
- Take advantage of builder incentives in the new construction market.
Working with real estate agents specializing in corporate relocation can help employees navigate market-specific challenges and find housing that meets their needs.
- Stay Informed on Policy Changes
The Trump administration’s impact on real estate markets will be felt in multiple ways, including:
- Trade tariffs driving up construction costs.
- Reduced affordable housing initiatives, creating supply constraints.
- Potential regulatory changes affecting mortgage financing.
Corporate mobility teams should stay current on federal and state-level housing policies that could influence affordability, tax incentives, and lending regulations. Partnering with a relocation management company (RMC) that actively monitors policy shifts can help HR teams make data-driven decisions.
- Consider Flexible Relocation Solutions
In a market where affordability remains challenging, offering flexible relocation options can make a significant difference for employees. Some options include:
- Remote work flexibility: Allowing employees to work remotely if housing in the destination city is prohibitively expensive.
- Short-term housing arrangements: Providing corporate housing or extended-stay options while employees explore homeownership opportunities.
- Rent-to-own assistance: Supporting employees who prefer to rent before committing to a purchase in their new location.
These flexible approaches can ease relocation stress and improve employee satisfaction.
Looking Ahead: The Future of Employee Relocation
While 2025 presents a stabilizing yet challenging housing market, corporate relocation professionals who stay agile, informed, and employee-focused will be best positioned to support successful moves. The interplay between economic factors, mortgage rates, housing supply, and government policies will continue to shape the real estate landscape.
Companies that prioritize data-driven relocation strategies, customized financial assistance, and expert real estate partnerships will create smoother, more successful transitions for their employees. As the year unfolds, maintaining open communication, proactive planning, and strategic adaptability will be key to navigating the U.S. real estate market in the corporate relocation space.
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