As the 2025 housing market approaches, many are curious about what lies ahead. If you're planning to buy or sell a home, two key factors will directly affect your decisions: mortgage rates and home prices. Here’s what experts are predicting and how it could impact your real estate plans.
One of the biggest influences on the housing market is mortgage rates, and the forecast for 2025 looks positive. After significant increases in recent years, experts predict rates will gradually ease over the course of the year. Although the decline may not follow a straight path, the overall trend points downward.
As rates decrease, housing affordability improves, which can lower your monthly mortgage payments. This shift is expected to bring more buyers back into the market. According to Charlie Dougherty, Director and Senior Economist at Wells Fargo:
“Lower financing costs will likely boost demand by pulling affordability-crunched buyers off of the sidelines.”
With more buyers entering the market, competition could increase. To stay ahead, work with your local real estate agent to understand how mortgage rate changes are affecting demand in your area.
While mortgage rates are expected to decline, home prices are projected to rise—but at a slower pace than in recent years. Experts forecast an average growth rate of about 2.5% nationally in 2025. This moderate growth is a welcome change from the rapid price increases many markets experienced recently.
What’s driving this price growth? The answer is demand. As more buyers return to the market, inventory will increase as sellers feel more confident listing their homes. However, with inventory still below normal levels in many markets, prices will continue to rise, albeit at a more sustainable pace.
It’s important to remember that national trends may not reflect your local housing market. Some regions may experience faster price growth, while others might see more modest gains or even slight declines. Lance Lambert, Co-Founder of ResiClub, explains:
“Some regional housing markets could see mild home price declines, while others could still see elevated appreciation.”
Working with a local real estate expert is crucial to understanding the dynamics of your market and how these trends will impact your plans.
For buyers, lower mortgage rates mean improved affordability, but you may face more competition as others re-enter the market. For sellers, while prices will rise, the increase will likely be more manageable and sustainable compared to previous years.
Regardless of your position, partnering with a local real estate agent is essential. They can provide insights into your specific market and help you make informed decisions.
The 2025 housing market is shaping up to be more favorable for both buyers and sellers, with mortgage rates expected to ease and home prices forecasted to rise at a slower, more sustainable rate. If you have questions about how these trends might impact your real estate plans, connect with Marks Realty Group to navigate the market and take advantage of upcoming opportunities.
Source: Keepingcurrentmatters.com
