Expert Forecasts for the 2025 Housing Market

Thinking about buying or selling a home this year? You’re probably wondering where the housing market is headed—and how it impacts your next move.

The best way to stay ahead of the curve is to rely on expert insights. Real estate professionals are constantly analyzing trends, and two key factors will shape the market in 2025: mortgage rates and home prices.

Will Mortgage Rates Drop?
Mortgage rates have been a hot topic, and many are hoping for a big drop. But while rates are expected to ease, they won’t be returning to 3-4% anytime soon.

Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains:

“Are we going to go back to 4%? Per my forecast, unfortunately, we will not. It’s more likely that we’ll go back to 6%.”

Industry experts predict rates will settle in the mid-to-low 6% range by the end of the year. However, this forecast is subject to change based on inflation and economic shifts.

The key takeaway? Trying to time the market perfectly isn’t realistic. Instead of waiting for the "perfect" rate, focus on what you can control—your budget, your goals, and getting expert guidance. A small dip in rates can still significantly lower your monthly payment.

Will Home Prices Drop?
In short? Probably not.

Even though mortgage rates are expected to ease, home prices will continue to rise—just at a slower, more typical pace. Experts predict an average 3% increase in home prices this year, which is a much more stable rate compared to the rapid spikes of recent years.

That means if you’re waiting for prices to drop before buying, you may be waiting a long time. While this might not be ideal for buyers hoping for lower prices, it’s good news for homeowners looking to build equity.

Why Are Prices Still Rising?
It all comes down to supply and demand. Even though more homes are hitting the market, inventory is still too low to meet buyer demand. Redfin explains:

“Prices will rise at a pace similar to that of the second half of 2024 because we don’t expect there to be enough new inventory to meet demand.”

That said, real estate is hyper-local. Some areas may see higher price growth, while others may level off or even dip slightly if inventory increases. The best way to understand what’s happening in your area? Work with a local expert.

Our Take
The market will continue evolving in 2025, with mortgage rates easing slightly and home prices rising at a steady, sustainable pace.

Instead of guessing what’s next, let’s connect. I’ll help you navigate the latest trends in our local market and make a smart, informed move—whether you’re buying, selling, or just exploring your options. (603) 519-3310