SPECIAL REPORT: Home Prices Set To Decline 9% Nationally This Year | Melody Wright

Then fall even farther for several more years

Housing expert Melody Wright has just updated her outlook on US home prices for 2025, now predicting they will decline nationally.

I asked her to come on the program to deliver this Special Report on her findings.

She expects average US home prices prices to fall -9% in 2025.

And then continue to fall farther for the next several years.

She’s also quite concerned that the carnage in the housing market this time could exceed that of the unwind of Housing Bubble 1.0 seventeen years ago, which she had a front row seat to as a mortgage analyst.

For all the details, click here or on the video below:

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Adam’s Notes: Melody Wright (recorded 2.5.25)

EXECUTIVE SUMMARY:

• Housing analyst Melody has just revised her forecast, now predicting a national decline in U.S. home prices in 2025. She expects the National Association of Realtors (NAR) price index to drop by 9% and the Census Bureau’s home price index to decline by 6%, though some individual markets could experience steeper declines of up to 20%. This adjustment comes after analyzing December 2024 data, which showed an unexpected increase in home sales but also indications of distress selling. The long-held belief that home prices would remain stable or appreciate due to limited inventory is now being questioned as new market dynamics emerge.

• The U.S. housing market saw stronger-than-expected sales activity in December 2024, particularly in markets where a slowdown had been anticipated. However, this increase in transactions was not due to organic demand, but rather motivated selling, including early signs of distress sales. In key regions such as Los Angeles, Richmond (VA), Indianapolis, Charlotte, and Washington, D.C., there was a notable increase in sales activity, but a simultaneous drop in prices, suggesting sellers are becoming more willing to accept lower offers. The primary drivers of these sales include rising mortgage delinquencies, job relocations, and financial pressure from higher interest rates and insurance costs.

• Several indicators suggest an increase in financial stress among homeowners. The mortgage delinquency rate has been rising since mid-2023, and foreclosure starts increased by 50% month-over-month and 29% year-over-year according to Black Knight’s December data. Additionally, real estate professionals are seeing more cases of