What to Expect From the 2025 Housing Market

The new year is in full swing, but everyone still has one big question on their minds: What’s ahead for the housing market? 

With inflation concerns, affordability challenges, and a new president in office, there’s a fair amount of uncertainty in the industry and the economy right now. That’s why it’s so important to stay on top of what’s going on in the market.  

Market knowledge is the cornerstone of every successful agent’s business strategy. But it’s only one piece of the puzzle. The other part is having a game plan to put those market insights into action. Because in 2025, standing out isn’t optional, it’s essential. 

Remember: last year’s complex market kept a lot of would-be buyers and sellers on the sidelines. But that doesn’t mean their goals have changed. It means that in 2025, there’s pent-up demand ready for you to tap — and prospects who need you to remind them of their goals and get them fired up about reaching them this year.  

Ready to position yourself as the go-to agent and close more deals in 2025? Here’s what industry experts anticipate for the housing market, plus how to use data and visuals to transform your online presence, build a reputation as an agent everyone trusts, and become a natural at turning your leads into listings.  

What Will Happen with Home Prices in 2025?

In recent months, there’s been plenty of conversation — and mixed information — about what will happen with home prices this year. Here’s what the data says.  

Last year, the supply of homes for sale grew because homes stayed on the market longer. And as Mike Simonsen, Founder of Altos Research, says, inventory levels will continue to increase throughout 2025:  

“2025 is poised to continue the trend of rising inventory across the country. We’ll probably finish 2025 with 15% more homes available than we have now.” 

If you’re worried that’ll make prices crash, don’t be. Nationally, inventory is still far below demand, which means you shouldn’t expect home prices to fall.  

As you can see from the above graph, the latest projections point to continuing home price appreciation. The good news is, we won’t see prices skyrocket like they did in years past. Instead, they’ll climb at a slower, more sustainable pace that’s typical of a more normal market. 

The reason? It all comes down to the number of homes for sale and how many buyers are out there. David Childers, President of Keeping Current Matters, sums it up best: 

“The main driving force on pricing is the limited amount of inventory in most markets across the country. That issue is not going to be solved overnight or in the next twelve months.” 

Of course, it’s important to keep in mind that the housing market is hyper-local, so what prices look like in your area may vary from what’s happening nationally.  

Will Mortgage Rates Come Down This Year?

With rates sitting at their highest levels in over six months, this is probably the top question everyone has right now. Here’s how to address it the next time someone says they’re going to wait for rates to come down.  

The truth is, rates aren’t going back to the 3-4% we saw a few years ago. The upside? Experts project mortgage rates should ease a bit over the course of the year. 

As you can see from the chart, rates are forecast to settle in the mid-to-low 6% by the end of 2025. 

Though, keep in mind, forecasts are based on what experts know right now. And since everything from inflation to employment to general market uncertainty have an impact on where rates go from here, some ups and downs along the way are still very likely. 

Will More Homes Sell in 2025?

There’s no doubt that affordability challenges and the number of people with historically low mortgage rates caused many consumers to pause their buying or selling plans over the last year. 

But thanks to a combination of inventory growth in 2024 and more rate-locked buyers coming back into the market, experts estimate, based on data, an uptick in homes sales this year. (See graph below) 

Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), agrees: 

“Home sales momentum is building. More buyers have entered the market as the economy continues to add jobs, housing inventory grows compared to a year ago, and consumers get used to a new normal of mortgage rates between 6% and 7%.” 

While we won’t see a massive jump, this does point to signs that the market is strengthening.  

Bottom Line

No one can predict the future, but with the right data and world-class visuals, you can develop a relevant market opinion based upon facts. And right now, experts are forecasting mortgage rates will settle down a bit this year alongside a moderate, more normal climb in home prices and sales.  

The real question is, now that you’re armed with the market knowledge you need to be the expert agent and you have the tools to create an action plan, are you going to commit to the process and drive your business forward this year?