If you’ve been keeping an eye on the market, you’ve probably already noticed some changes this year. So, what’s on the horizon? From home prices to mortgage rates, here’s what the latest expert forecasts predict for the remainder of 2025 and what these shifts could mean for you.
Will Home Prices Fall?
Many buyers are hoping home prices will drop soon, and recent headlines showing slight dips in some areas are fueling that belief. It’s easy to think a bigger drop is just around the corner, but let’s take a look at the facts.
While the pace of home price growth is slowing, that doesn’t mean we’re heading toward a crash. According to the National Association of Home Builders (NAHB):
“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.”
Even with this shift, experts still expect prices to rise at the national level. On average, eight leading forecasters project home prices will increase by about 1.5 to 2 percent in 2025.
If you’re holding out for a major drop in home prices, experts say that’s unlikely. While some markets are seeing slight declines, the average dip is only around 3.5 percent—a big difference from the nearly 20 percent drop we saw during the 2008 crash.
It’s also important to look at the bigger picture. Even with these minor shifts, home values have climbed significantly in recent years. According to the Federal Housing Finance Agency (FHFA), prices are up 55 percent nationally compared to five years ago.
The bottom line? Prices aren’t crashing. They’re still expected to rise, just at a slower pace. Some experts even suggest prices may level out by the end of the year. Of course, trends will vary depending on your local market, so it’s a smart move to connect with a trusted real estate professional to get the most accurate insights for your area.
Will Mortgage Rates Come Down?
A common mindset among today’s buyers is: I’ll just wait for mortgage rates to come down. But is that really the best approach? 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, trying to time the market could leave you on the sidelines longer than expected. Most experts believe rates will stay in the 6 percent range, with current projections showing them settling in the mid-6 percent range by the end of the year.
That’s not a major shift from where rates stand today. So if you’re thinking about moving, let’s connect and explore your options. While rates might not be as low as you’d like, it’s important not to put your plans on hold based on something that, according to the data, may not happen anytime soon.
Having a knowledgeable expert by your side is especially important this year. Economic factors like inflation and other key indicators can influence where rates go next, and staying informed will help you make the best decision for your situation.
The Takeaway for Buyers and Sellers
Whether you’re buying, selling, or considering both, navigating today’s market takes strategy, not guesswork. Home prices are still rising across the country, just at a slower pace, and mortgage rates are expected to hold steady. Overall, the outlook points to a more balanced market, not a downturn.
Bottom Line
If you’re thinking about making a move, the smartest approach is to focus on your personal goals, not just the headlines. Partnering with a real estate professional who understands the changing conditions in our local market can make all the difference.
Let’s connect and talk about what’s happening in our area so we can create a plan that fits your needs.
