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The past five years have been a rollercoaster for the real estate industry as record-low rates — and their historic rise — have agents and consumers grasping for some semblance of stability. Stabilizing mortgage rates yielded a significant boost in homebuyer sentiment at the end of 2024; however, the Federal Reserve’s decision to forgo additional rate cuts and President Trump’s tariff-related game of chicken with Mexico and Canada have reignited deep worries about the market’s trajectory.
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Although the future is hazy, Keller Williams co-founder Gary Keller told agents at the franchisor’s annual Family Reunion conference on Tuesday to stay calm. The fluctuations in mortgage rates, home price growth and other key indicators are expected as recoveries are rarely linear, he said.
Gary Keller
“It’s not getting progressively better right now, and what’s interesting is that people keep expecting it to get progressively better,” he added. “If you go back and look at history, when you get into a trough like this, it typically takes three to four years to get out of it.”
“So if you were hoping we were kind of going to come on stage today and go, ‘It’s over. It’s all back. The easy deals are back,’ That’s not true,” he added. “My guess is we have at least two more years this year and next year. That’s just a guess.”
Keller said 2025 home sales will likely hit 4.2 million, a pace that’s the slowest since 1995. Home price appreciation has slowed, too, but that shouldn’t alarm homeowners and homesellers.
“[Four percent] is the expected appreciation rate of real estate over time. Right now you’re at 9.9 percent,” he said. “If you had no appreciation for two and a half years, you’d be at the trend line. That rarely ever happens.”
Slowing appreciation enables more homebuyers to participate in the market, which creates a net positive environment for homesellers.
“That matters to us because that means homes are trending towards affordability,” KW Vice President of Strategic Content Jay Papasan said. “I mean, between the mortgage rates and just the actual price of [homes] we’re getting to a place where people can afford to buy them.”
Keller, Papasan and KW Head of Industry and Learning Jason Abrams acknowledged the disconnect between homebuyer sentiment and improving affordability indicators. However, they said it’s up to experienced agents to help newbie buyers — particularly millennials and older Gen-Zers — see that the long-term benefits of homeownership are worth the short-term squeeze.
“Give real estate time, and it all works out,” Abrams said.
Alongside newbie homebuyers, newbie agents need some encouragement, too. Abrams and Keller said although transaction sides have declined, transaction volume has remained robust, meaning there’s an opportunity to do fewer, high-price deals — if they’re willing to do the work.
“The gimme business has gone away,” Keller said. “So those individuals who practice lead generation get their unfair share and that leaves 60 percent of the real estate agents in the market selling nothing because they’re sitting and waiting for the tide to come back in so their boat can float without doing anything.”
“The opportunity is there,” he said. “I’ve had people ask me, ‘Is it a good time to get into real estate?’ I go, ‘Yeah, it’s a great time to get into real estate.’ There are more people sitting on the sideline than you can imagine.”
The trio said the most successful agents contextualize the market for consumers. The best opportunity to do that, they said, is with mortgage rates. Although rates are much higher than the 2 percent to 3 percent seen a few years ago, they’re still on par with historical averages — a piece of information that could make it easier for buyers and sellers to leap into the market.
“This is why you’re seeing some of the biggest agents in the country going out with the MOFIR (Making Offers for Immediate Response), which is saying ‘Through my mortgage partner, you can refinance for free at any time that you want,’” Abrams said. “Having an answer to the rate problem is important for everybody.”
Beyond mortgage rates and home prices, Keller said consumers and agents are grappling with the potential impacts of President Trump’s tariff, immigration and tax policies, and his decision to give billionaire business owner Elon Musk free range over the nation’s budget through the newly-minted Department of Government Efficiency (DOGE).
Keller said there are potential upsides and downsides to Trump and Musk’s approach. For example, he said, Musk’s so-called buyout plan could lead to a boom in inventory and sales as federal workers leave Washington, D.C., and surrounding areas. Meanwhile, Trump’s mass deportation strategies could tank the Texas housing market as a fourth of construction workers in the state are undocumented.
“We do not celebrate anybody’s pain,” he said of the unemployment risk for federal workers. “So let’s be real clear about that. But academically, if I’m permitted to be academic, it statistically does, and the reason is that it brings on a massive amount of supply with motivated people that want to sell.”
The trio then dove into the president’s tariff and trade policies, his plan to ditch federal income taxes, and intensifying tensions with Canada, Mexico, Denmark and other European Union members. History, they said, shows that Trump’s approach to tariffs and trade, in particular, increases financial risk for the country.
“Tariffs are neither good nor bad … Tariffs are being levied back and forth to some degree on a regular basis across history, but they don’t bring in enough money to finance the government,” Keller said. “… I’m apolitical on this. I only report the facts and so we have to be aware that we’re moving into a very economically risky period in America … It could turn out great. I’m not saying it will or won’t.”
“I will say this, that every generation needs its economic event that resets prices on assets that allows them to get in on a lower floor and then ride the next wave,” he added. “When you don’t have a reset, then you have a problem.”
Keller ended the session by briefly reminding agents to follow new telemarketing regulations as they ramp up lead generation efforts this year — KW paid $40 million to settle a cold call class action suit in 2023 — and encouraging agents to leverage the National Association of Realtors’ expansive consumer and market reports to inform their business moves.
Keller said NAR’s reports prove consumers overwhelmingly still want their information from agents, and now’s the time to step up and guide them through market challenges.
“There’s no quote-unquote, real estate celebrity that’s the face of first-time homebuyers nationally,” he said. You don’t see people being interviewed on any of the shows about first-time homebuyers. There’s a there’s a gap there. There’s an opportunity.”