2025 Housing Market Forecasts: What To Expect

As we look ahead to 2025, understanding expert projections for the housing market is crucial. Whether you're planning to buy or sell a home next year, having a clear picture of what the experts are forecasting can help you make informed decisions about your homeownership plans.

Here’s an early look at the most recent projections for mortgage rates, home sales, and prices in 2025.

Mortgage Rates Are Projected To Come Down Slightly

Mortgage rates have a significant impact on the housing market, and the forecasts for 2025 from Fannie Mae, the Mortgage Bankers Association (MBA), the National Association of Realtors (NAR), and Wells Fargo all point to a gradual decline in mortgage rates throughout the year (see chart below).

Rates are expected to ease as inflation continues to cool and unemployment rates see a slight rise, both indicators of a strong but slowing economy. Many experts believe these conditions will encourage the Federal Reserve to lower the Federal Funds Rate, which typically leads to lower mortgage rates. As Morgan Stanley notes:

“With the U.S. Federal Reserve widely expected to begin cutting its benchmark interest rate in 2024, mortgage rates could drop as well—at least slightly.”

Expect More Homes To Sell

In 2025, the housing market is expected to see a rise in both the supply of available homes and in demand. Many buyers and sellers who have been on the sidelines due to higher rates are likely to enter the market. This increase in activity is one of the main reasons experts project a rise in home sales next year.

According to forecasts from Fannie Mae, MBA, and NAR, total home sales are expected to climb slightly, with an average of about 5.4 million homes predicted to sell in 2025 (see graph below).

This would mark a modest increase from the lower sales numbers seen in 2023 and 2024. For context, approximately 4.8 million homes were sold in 2023, and expectations are for around 4.5 million homes to sell in 2024.

While the anticipated dip in mortgage rates may not result in a surge of buyers and sellers, it will likely encourage more people to move. This means more homes will be available for sale, increasing competition among buyers.

Home Prices Will Go Up Moderately - Nationally

With more buyers entering the market, upward pressure on home prices will continue. The latest price forecasts from 10 of the most trusted sources in real estate indicate that home prices will rise nationally by about 2.6% on average next year (see graph below).

While opinions vary on how much prices will increase, experts agree that prices will continue to climb at a moderate, more normal rate. However, it’s important to remember that price changes can differ by local market.

Remember, those are national numbers. Looking locally here in Seattle - it's a much different story. The thing to remember about agrigated data is that not all data points are created equal, even though they are agrigated together. Meaning, Condos don't appreciate at the same rate as single family houses. Either do Townhomes... So when looking at agrigated data, you need to know that Single Family Detached homes are bringing up the averages. Your results may vary. But here are some interesting numbers to look at.

The key takeaway here is that even with Arizona, Texas, and Florida seeing some real flattening, and some agent friends reporting anecdotally that prices are falling - albeit not at any significant rate - the national trend is an increase in home values and pricing. More-so, here in Seattle, we will more than likely beat the national upward trend with prices rising faster than national averages.

Bottom Line

Understanding the 2025 housing market forecasts can help you plan your next move. Whether you're buying or selling, staying informed about these trends will ensure you make the best possible decisions. Reach out to a trusted real estate agent to discuss how these forecasts could impact your plans.

If you're making a move, reach out, and lets chat. Happy to brainstorm and come up with a solution that gets you a tangible and actionable plan that fits your unique situation.

Best,

Justin H Gazabat
Broker | PNW, Seattle, Ballard, East Side
Your Friendly Seattle Neighborhood Real Estate Professional.
www.JustinGazabat.com

PS: If anyone in your social or work circles considering a move, just send Me an intro text or email with their best contact info, make sure everyone is CC’d and I’ll take care of the rest! I promise to take great care of them, serve them well, make you look good, plus help them get great results.

*Information from our friends at Fannie Mae, Mortgage Bankers Association (MBA), National Association of Realtors (NAR), Keeping Current Matters, MBS Highway, Wells Fargo and Morgan Stanley.