2025 Housing Market Forecasts: What Buyers and Sellers Need to Know

As we look ahead to the 2025 housing market, experts are offering key insights that could influence your real estate plans. Whether you're considering buying or selling a home next year, understanding forecasts for mortgage rates, home sales, and prices can help you make informed decisions.

Mortgage Rates Expected To Ease Slightly in 2025

Mortgage rates are a major factor in the housing market, and projections from Fannie Mae, the Mortgage Bankers Association (MBA), the National Association of Realtors (NAR), and Wells Fargo suggest a gradual decrease in rates throughout 2025. This anticipated dip in mortgage rates is likely due to easing inflation and a slight increase in unemployment, indicators of a stable but slowing economy. As Morgan Stanley notes, "With the U.S. Federal Reserve widely expected to begin cutting its benchmark interest rate in 2024, mortgage rates could drop as well—at least slightly."

Home Sales Are Projected To Increase

With mortgage rates easing, the housing market is expected to see more activity from both buyers and sellers. Many who have delayed moving due to high rates may finally re-enter the market, contributing to a modest uptick in home sales. Fannie Mae, MBA, and NAR predict total home sales in 2025 will reach approximately 5.4 million, up from 4.5 million in 2024. While this doesn’t represent a huge spike, it does indicate a gradual increase in market activity as rates stabilize and more inventory becomes available.

Home Prices Likely To Rise Moderately

Alongside increased demand, home prices are expected to see moderate growth. According to recent forecasts from leading real estate experts, home prices are projected to increase by an average of 2.6% in 2025. This growth is slower than the rapid appreciation seen in recent years, indicating a return to a more stable, sustainable market. However, it's important to remember that price trends can vary by local market, so consulting a local expert is essential for specific insights.

Bottom Line

Being aware of 2025 housing market forecasts can help you make strategic decisions for buying or selling a home. With mortgage rates expected to ease, an increase in sales volume, and moderate price growth, the market may offer more opportunities for buyers and sellers alike. Connect with a real estate professional to understand how these forecasts impact your unique situation and to plan your next move confidently.