As 2025 approaches, the housing market is already shaping up to be an interesting year for both buyers and sellers. If you’re planning to make a move, you’re likely wondering what the forecast looks like for mortgage rates and home prices. While no one can predict the future with absolute certainty, experts are offering some promising insights that can help you prepare.
Mortgage Rates: A Gradual Decline Is Expected
One of the biggest factors influencing the housing market in recent years has been mortgage rates. After a sharp rise over the past few years, the good news is that economists expect rates to ease slightly throughout 2025.
While this decline may not happen in a straight line—since rates often fluctuate based on new economic data and inflation—the overall trend should point downward. As rates come down, homebuyers will find it easier to afford a mortgage, potentially bringing more buyers off the sidelines and into the market.
As Charlie Dougherty, Director and Senior Economist at Wells Fargo, explains:
“Lower financing costs will likely boost demand by pulling affordability-crunched buyers off of the sidelines.”
The takeaway? Lower mortgage rates will likely lead to more demand in the housing market, so it could be a good time to get ahead of the competition if you’re thinking of buying or selling.
Home Prices: Slow and Steady Growth
While mortgage rates are projected to ease, home prices are forecast to grow at a more moderate pace. Experts suggest that home prices will rise by around 2.5% nationally in 2025, a far cry from the double-digit increases seen in recent years.
This modest growth is expected to be driven by increased demand as buyers return to the market. At the same time, more sellers will likely list their homes as the pressure from higher mortgage rates eases, bringing more inventory to the market. While prices will rise, the increased supply should help keep that growth in check.
However, as with any national forecast, there will be regional variations. Some markets may see higher appreciation, while others may experience more moderate gains or even slight declines.
As Lance Lambert, Co-Founder of ResiClub, notes:
“Even if the average national home price forecast for 2025 is correct, it’s possible that some regional housing markets could see mild home price declines, while some markets could still see elevated appreciation.”
What Does This Mean for Buyers and Sellers?
For buyers, lower mortgage rates in 2025 could mean a more affordable monthly payment and greater flexibility in choosing the right home. But with more buyers expected to enter the market as rates decrease, competition for homes could ramp up. Working with a real estate agent will help you stay competitive and understand the local market dynamics.
For sellers, while home prices are expected to rise, they will do so at a more moderate pace than in previous years. That’s good news because it means the market won’t be as overheated. More homes coming onto the market will also balance demand, helping you find serious buyers while still benefiting from price appreciation.
Why You Should Work with a Real Estate Expert
Navigating the shifting dynamics of the 2025 housing market requires expert insight. Whether you’re buying or selling, a real estate agent can provide guidance on how these national trends translate to your local area. They’ll help you understand the best time to make a move, negotiate deals, and ensure you’re making the most of the opportunities ahead.
Bottom Line
With mortgage rates expected to decrease and home prices projected to rise at a slower, more sustainable pace, 2025 is shaping up to be a promising year for both buyers and sellers. To make sure you’re prepared, reach out to a local real estate agent for expert advice.
Thinking about buying or selling in 2025? Contact Influencers Realty Group today to discuss how we can help you navigate the market and make the most of the upcoming opportunities.
