Curious about where the housing market is headed in 2025? The good news is that experts are offering some promising forecasts, especially when it comes to two key factors that directly affect your decisions: mortgage rates and home prices.
Whether you’re thinking of buying or selling, here’s a look at what the experts are saying and how it might impact your move.
Mortgage Rates Are Forecast To Come Down
One of the biggest factors likely affecting your plans is mortgage rates, and the forecast looks positive. After rising dramatically in recent years, experts project rates will ease slightly throughout the course of 2025 (see graph below):
While that decline won’t be a straight line down, the overall trend should continue over the next year. Expect a few bumps along the way, because the trajectory of rates will depend on new economic data and inflation numbers as they’re released. But don’t get too hung up on those blips and reactions from the market as they happen. Focus on the bigger picture.
Lower mortgage rates mean improving affordability. As rates come down, your monthly mortgage payment decreases, giving you more flexibility in what you can afford if you buy a home.
This shift will likely bring more buyers and sellers back into the market, though. 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.”
As that happens, both inventory and competition among buyers will ramp back up. The takeaway? You can get ahead of that competition now. Lean on your agent to make sure you understand how the shifts in rates are impacting demand in your area.
Home Price Projections Show Modest Growth
While mortgage rates are expected to come down slightly, home prices are forecast to rise—but at a much more moderate pace than the market has seen in recent years.
Experts are saying home prices will