Housing Market Forecasts for the Rest of 2025

If you’ve been watching the market, you’ve likely noticed a few changes already this year. But what’s next? From home prices to mortgage rates, here’s what the latest expert forecasts suggest for the rest of 2025 – and what these shifts could mean for you.

Will Home Prices Fall?

Many buyers are hoping home prices will come down soon. Recent headlines about prices dipping in some areas are leading some people to believe it’s just a matter of time before there’s a bigger drop. But here are the facts.

While home price growth is slowing down, that doesn’t mean we’re headed for a crash. As NAHB explains:

“House price growth slowed . . . partly due to a decline in demand and an increase in supply. Persistent high mortgage rates and increased inventory combined to ease upward pressure on house prices. These factors signaled a cooling market, following rapid gains seen in previous years.”

However, experts say that even with this slowdown, prices will still rise at the national level this year. The average of 8 leading forecasters shows prices are expected to go up 1.5-2% in 2025 (see graph below):

That means, if you’re waiting for a significant drop, experts agree that’s not in the cards.

Keep in mind that while some markets are already seeing prices come down slightly, the average dip is only -3.5%. That’s a far cry from the nearly 20% decline the market experienced during the 2008 crash.

Plus, those small changes are easily absorbed when you consider how much home prices have climbed over the past few years. Data from the Federal Housing Finance Agency (FHFA) shows prices are up 55% nationally compared to just 5 years ago.

The takeaway? Prices aren’t crashing. They’re expected to keep climbing – just not as quickly these days. And some may argue they’ll be closer to flat by the end of this year. However, this is likely to vary by market, with some local fluctuations. So, lean on a pro to see the latest price trends for your area.

Will Mortgage Rates Come Down?

Another common thought among today’s buyers is, ‘I’m just going to wait for rates to come down.’ But is that a smart strategy? According to Yahoo Finance:

“If you’re looking for a substantial interest rate drop in 2025, you’ll likely be left waiting. The latest news from the Federal Reserve and other key economic data point toward steady mortgage rates on par with what we see today.”

In other words, avoid trying to time the market or waiting for a drop that may not materialize. Most experts say rates will remain in the 6s, and current projections have them settling in the mid-6% range by the end of this year (see chart below):

And that’s not a significant change from where they are right now. So, if you need to move, let’s discuss how to make it happen and what to watch out for. Because, while rates may not be as low as you want them to be, you don’t want to put your needs on the back burner, hoping for something the data shows is unlikely to happen.

Working with an expert who is closely monitoring all the economic factors that can influence mortgage rates is going to be essential this year. That’s because changes in factors such as inflation and other key drivers could impact how rates move going forward.

The Takeaway for Buyers and Sellers

Whether you’re buying, selling, or considering both, this market requires a strategy, not guesswork. Prices are still rising nationally (just more slowly), and rates are projected to stay pretty much where they are, so the bigger picture is one of moderation – not a meltdown.

Bottom Line

If you want to make a move, your best bet is to focus on your situation – not what the headlines say – and work with a real estate pro who knows how to navigate the shifting conditions in our local market.

Let’s discuss what’s happening in our area to create a plan that works for you.