2025 Housing Market Forecast: What to Expect in the Year Ahead

2025 Housing Market Forecast: What to Expect in the Year Ahead

As we enter 2025, the real estate market is poised for exciting changes. Whether you’re a prospective homebuyer, seller, or investor, understanding the forecasts for mortgage rates, home prices, and inventory can help you make informed decisions. Let’s dive into what experts predict for the housing market this year.

Mortgage Rates: A Gradual Decline

The big question on many buyers' minds is: What’s happening with mortgage rates?

Experts anticipate a slight decline in mortgage rates throughout 2025, with projections settling in the 6%–6.5% range by year-end. While there may be some fluctuations along the way, this offers some relief compared to recent years. Here's what key players in the market are forecasting for 30-year fixed rates:

• Redfin: 6.8%
• CoreLogic: 6.5%
• Realtor.com: 6.2%
• NAHB: 6.12%

With an average rate projection of 6.36%, buyers could experience better affordability as the year progresses.

Home Prices: A Steady Climb

Nationally, home prices are expected to rise at a sustainable and more balanced pace. The average forecast for home price appreciation sits at 3%, with some regions potentially seeing even higher gains. Here are some standout projections:

• AEI Housing Center: 5.5%
• Wells Fargo: 4.9%
• Goldman Sachs: 4.4%

On the other hand, a few forecasters, like Morgan Stanley and Moody’s Analytics, predict slight declines in specific markets, emphasizing how local dynamics will play a key role. This balanced growth could signal stability for both buyers and sellers, making it a favorable environment for transactions.

Inventory: More Options for Buyers

Good news for buyers! The number of homes available for sale is expected to increase by 15% in 2025. This boost in inventory provides more opportunities to find your perfect home and could ease some of the competition seen in past years.

According to Mike Simonsen, Founder of Altos Research:

“2025 is poised to continue the trend of rising inventory across the country. We’ll probably finish 2025 with 15% more homes available than we have now.”

If you've been waiting for the right time to enter the market, this year could offer the options you’ve been looking for.

What Does This Mean for You?

These forecasts paint a picture of a more balanced housing market in 2025. While mortgage rates remain a key factor, the combination of steady price growth and increased inventory could create opportunities for both buyers and sellers.

Whether you’re planning to make a move or invest in real estate, staying ahead of market trends is crucial. Let’s connect to discuss how these changes might impact your plans and goals for 2025.