What’s Happening in the Real Estate Market Right Now?
The real estate market in February 2025 continues to evolve as inventory challenges, mortgage rate fluctuations, and shifting buyer behavior shape the landscape. This report provides a deep dive into national trends and a focused analysis of the South Jersey Shore market (Cape May & Atlantic County).
Get key insights into home price trends, mortgage rate projections, home equity levels, and how long homeowners are staying in their homes. We also explore the potential impact of Fannie Mae & Freddie Mac conservatorship changes and what they mean for homebuyers and investors.
National Real Estate Market Trends
1. Home Price Growth & Inventory Levels
- Home prices continue to rise, but at a slower pace due to affordability constraints.
- National inventory remains tight in major metro areas, though some regions have seen slight supply increases.
2. Homeowner Equity & Length of Homeownership
- U.S. homeowners hold record levels of home equity, fueled by years of price appreciation.
- The average homeowner tenure has increased to over 10 years, limiting the number of homes entering the market.
3. Mortgage Rate Forecast for 2025
- Q1 2025: 6.70% - 7.10%
- Q2 2025: 6.60% - 6.90%
- Q3 2025: 6.50% - 6.70%
- Q4 2025: 6.50%
Key Takeaway: Rates are expected to decline slightly, but affordability remains a key challenge.
South Jersey Shore Market Overview (Cape May & Atlantic County)
Current Market Conditions
The South Jersey Shore real estate market remains highly dynamic, with moderate inventory and steady buyer activity.
1. Inventory & Home Prices
- Cape May County: 3.61 months of inventory (-7.4% MoM, -0.6% YoY).
- Atlantic County: 3.15 months of inventory (+2.6% MoM, +5% YoY).
- Median home prices remain steady with slight appreciation due to limited supply.
2. Market Activity & Buyer Demand
- Pending Listings: 498 homes under contract.
- New Listings: 504 homes added in January 2025.
- Median Days on Market: 77 days, reflecting stable demand.
Impact of Freddie Mac & Fannie Mae Conservatorship Changes
The potential end of Freddie Mac & Fannie Mae conservatorship has been a key topic in 2025, as policymakers debate whether these government-sponsored enterprises (GSEs) should remain under federal control or transition to private entities. If conservatorship remains, mortgage rates are expected to stay stable, providing predictability for buyers. However, if the GSEs are fully released without a government guarantee, mortgage rates could rise by 60-90 basis points, making homeownership less affordable. Alternatively, if an explicit government guarantee is introduced, rates could decline by up to 25 basis points due to increased investor confidence in mortgage-backed securities. These projections come from industry forecasts, government policy discussions, and historical trends, with analysts closely watching how regulatory decisions could affect mortgage affordability for millions of Americans.
- Conservatorship Remains: Rates remain stable.
- Full Release (No Government Guarantee): Rates could rise by 60-90 basis points.
- Explicit Government Guarantee: Rates could drop by up to 25 basis points.
What This Means for You
- Sellers: Low inventory in Cape May & Atlantic County makes well-priced homes highly desirable.
- Buyers: If mortgage rates decline, affordability will improve, but waiting comes with risks.
- Investors: Strong rental demand in South Jersey Shore makes vacation and short-term rentals an attractive investment.
Frequently Asked Questions
What are the current real estate trends in February 2025?
The real estate market is experiencing steady home prices, limited inventory, and fluctuating mortgage rates. The South Jersey Shore market remains competitive, with Cape May and Atlantic Counties seeing moderate price appreciation.
Will mortgage rates go up or down in 2025?
Mortgage rates are projected to slightly decline throughout 2025, with forecasts showing rates ranging from 6.50% to 7.10% depending on market conditions.
How will Freddie Mac & Fannie Mae policy changes impact home buyers?
If conservatorship remains, mortgage rates should stay stable. However, if Freddie Mac & Fannie Mae are fully released without a government guarantee, rates could rise by 60-90 basis points. If an explicit government guarantee is introduced, rates could drop by up to 25 basis points.
Should I buy a home now or wait?
With mortgage rates expected to decline slightly, now is a good time to buy—especially with limited inventory keeping home prices stable. Waiting could mean facing increased competition.
What is the current housing inventory in South Jersey Shore?
As of February 2025, Cape May County has 3.61 months of inventory, while Atlantic County has 3.15 months. These low levels indicate a competitive market.
About the Author
Adam D'Annunzio
Adam is a seasoned real estate expert specializing in the South Jersey Shore market, with over 14 years of experience in residential and investment properties. As a trusted advisor, he helps buyers, sellers, and investors navigate the dynamic real estate landscape with market-driven insights and strategic guidance.
