2025 Housing Market Forecast: What Buyers and Sellers Can Expect
Listing Activity: Good news for buyers in 2025—more homes will be available! Experts predict a 10% increase in listings, giving you more choices. As mortgage rates ease, more homeowners are deciding to sell, which means a wider selection of properties to explore.
Home Prices: Home prices are expected to keep rising in 2025—but at a slower pace. After increasing by 4.5% in 2024, experts predict prices will grow by 3.9% this year, offering a bit more stability for buyers.
New Construction Starts: Modest growth is expected as standing inventory limit new construction in 2025.
Mortgage Rate Drop: Mortgage rates will likely stay volatile through the spring, but they should start to decrease as we head into summer. By the end of 2025, the average rate for a 30-year fixed mortgage is expected to be around 6.35%. While this offers some relief for buyers, there’s still a level of uncertainty to keep in mind.
Affordability: First-time homebuyers have faced some challenges recently with rising borrowing costs and home prices. While these hurdles are still present in 2025, the good news is that the gap between home price growth and wage growth is expected to narrow, making homeownership a bit more attainable.
Foreclosure Activity: While foreclosure activity has increased slightly from last year, it’s still well below historical averages. Experts don’t anticipate that foreclosures will significantly affect the housing market in 2025. With homeowner equity on the rise, those facing financial struggles are more likely to sell their homes rather than go through foreclosure.
There’s a lot to feel good about: While we’re not expecting the ultra-low rates we’ve seen in the past, a more moderate pace of growth is actually a positive thing for long-term stability. Extreme price increases aren’t sustainable for anyone, and this shift toward steadier progress creates a much more balanced market. The affordability challenges are still present, but with home equity levels staying high and a calmer market overall, 2025 is shaping up to be a promising year.