Real estate markets in 2025 are navigating elevated mortgage rates, constrained inventory, and significant regional variation. Here are the data signals that matter most for investment decisions this year.
1. Inventory Levels
Total housing supply remains near historical lows nationally. Markets where inventory is trending up (months of supply rising above 4) are entering buyer-favourable conditions — good for acquisitions, potentially challenging for flips.
2. Mortgage Rate Trajectory
Every 1% change in the 30-year fixed rate affects purchasing power by approximately 10%. At 7%, a $1,800/month payment supports a $271,000 loan; at 6%, the same payment supports $300,000. Watch the 10-year Treasury yield (mortgage rates historically track it + ~170bps spread) as a leading indicator.
3. Employment and Migration
Real estate demand is fundamentally a function of people needing housing. Markets gaining net domestic migrants from more expensive metros (Phoenix, Tampa, Nashville in recent years) sustain demand even as affordability pressures build.
4. YoY Price Change Momentum
Track price change momentum using ZipMarketData's yoy_price_change field. Markets where YoY change is accelerating (from +2% to +4%) are entering expansion phase — typically the best risk-adjusted entry point.
5. Affordability Index Trend
Monitor affordability trends — falling HAI signals a market approaching an affordability ceiling that will moderate price growth. Markets with rising HAI (prices falling relative to incomes) are becoming structurally cheaper — potential recovery plays.