Housing Market Forecasts for the Rest of 2025

If you’ve been following the real estate market in 2025, you’ve likely seen some shifts already — but what’s coming next? From rising home prices to steady mortgage rates, here’s what the latest housing market predictions reveal for the rest of the year, and how these changes could impact homebuyers and sellers alike.

Will Home Prices Fall?

Many homebuyers are hoping for a drop in home prices, especially as recent headlines highlight slight price declines in certain areas. This has led some to believe a major housing market correction is coming. However, the latest real estate data and expert forecasts tell a different story—here’s what you need to know about where home prices are really headed in 2025.

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.”

But experts say, even with that slowdown, prices will still rise this year at the national level. 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 major drop, experts agree that’s just not in the cards.

Keep in mind, while some markets are already seeing prices come down slightly, the average dip is just -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. But, again, this is going to vary by market, with some local ups and downs. 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, don’t try to time the market or wait for a drop that may not be coming. 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):

Mortgage rates are expected to stay close to current levels, with only minor fluctuations through the rest of 2025. If you’re planning to buy or sell a home, now is the time to focus on your personal goals rather than waiting for a significant rate drop that experts say isn’t likely. Let’s connect to discuss your real estate options and create a strategy that works in today’s market conditions.

Partnering with a real estate expert who closely monitors key economic factors—like inflation, Federal Reserve policy, and market trends—is crucial in 2025. These elements directly impact mortgage rates, and staying informed can help you make smarter decisions when buying or selling a home in today’s housing market.

The Takeaway for Buyers and Sellers

Whether you’re buying, selling, or planning to do both in 2025, navigating today’s real estate market takes strategy—not guesswork. While home prices are still rising nationwide, the pace has slowed, and mortgage rates are expected to remain steady. The current housing market is stabilizing, not crashing, making it essential to work with a real estate professional who can guide you through every step with data-driven insights.

Bottom Line

If you’re thinking about buying or selling a home in 2025, the smartest move is to focus on your personal goals and work with a trusted real estate expert who understands the current housing market trends in your local area. Don’t rely on headlines—partnering with a knowledgeable agent can help you navigate changing market conditions and make the right decision at the right time.

Let’s talk about what’s happening in our area to build a plan that works for you.