What's Happening to the St. George Real Estate Market This Year?

We know that headlines have many people who are looking to sell and/or buy this year feeling uncertain. What's about to happen to the real estate market in St. George, and nationwide? While none of us has a crystal ball, there are some things experts agree on that can give us some helpful guidance. As we move through 2025, the U.S. housing market is navigating a complex landscape shaped by fluctuating mortgage rates, limited inventory, and evolving buyer behavior.

Here's what you need to know about the market this year, whether you're looking at homes for sale in St. George or you are planning to sell your home here. 

A Decline in Mortgage Rates

After we said goodbye to record low interest rates in the 2% and 3% range, this has been a primary concern for most buyers. Even though we're still enjoying historically low rates, they have still been a significant barrier for many prospective homebuyers. 

In 2024, 30-year fixed rates fluctuated between 6.08% and 7.22%. With the Federal Reserve reducing the federal discount rate by 100 basis points since September 2024, there's optimism that mortgage rates will continue to decrease in 2025. However, the pace of these reductions may slow, and experts are predicting a slight decrease that should bring us into the low 6% or high 5% range. 

Housing Inventory Will Grow, but Remain Tight

A significant number of homeowners are holding onto their properties, many with mortgage rates below 4%, leading to a phenomenon known as the "lock-in" effect. This reluctance to sell contributes to the ongoing inventory shortage. Additionally, challenges in new home construction, such as high material costs and labor shortages, further constrain supply. 

So, while we do see inventory rising, we are not concerned about a market crash like we saw in response to the 2008 mortgage crisis. Home values will be maintained, and sellers will be in a good position if they decide to list their homes. We're moving toward a more balanced market, but still favoring sellers to some degree. 

Prices Will Moderate Slightly

Most experts agree that housing prices will stay about the same, or decrease slightly. We don't anticipate dramatic changes in housing prices in response to changes in interest rates because of where we stand with inventory. A dramatic crash in home prices is very unlikely, but you may be able to find a better deal now that you did a few years ago. 

What Can Buyers and Sellers Do?

Looking for tips to navigate these market conditions? Start here. 

For Buyers:

• Financial Preparation: Ensure your credit score is strong, reduce your debts, and save for a down payment.
• Stay Informed: Monitor mortgage rate trends and be ready to act when favorable conditions arise. Talk with a mortgage lender about pre-approval now so you're ready to make a move when rates are ready. 
• Explore Options: Consider a variety of properties and be open to different locations to increase your chances of finding the right home.​

For Sellers:

• Realistic Pricing: You need to work with a St. George real estate professional to set a competitive price based on current market conditions.
• Property Presentation: Invest in minor renovations or staging to make your home more appealing to potential buyers.
• Flexibility: Be prepared for negotiations and consider offering incentives to attract buyers.

Ready to learn more? We're here to answer your questions about St. George real estate and help you every step of the way, so contact us any time.