As we step into 2025, the housing market is already revealing some exciting trends in mortgage rates, inventory, and pricing. Whether you’re looking to buy or sell, staying informed about these shifts will help you make the best decisions in real estate. Let’s break down what you can expect this year.
Mortgage Rates: A Gradual Decline
After years of high rates, there’s good news on the horizon—mortgage rates are expected to gradually decline in 2025. While we won’t be returning to the ultra-low 4% rates of the past, experts predict a new normal in the range of 5.9% to 6.5%.
What This Means for Buyers
Lower mortgage rates mean improved affordability, with smaller monthly payments giving buyers more purchasing power. However, with limited inventory, competition may still be a factor. If you’re considering buying a home, acting sooner rather than later could help you secure a better deal before the market heats up.
Home Sales: Modest Growth Ahead
Following a slower 2024, the real estate market is expected to pick up this year. According to the National Association of Realtors (NAR), existing home sales are projected to reach 4.1 to 4.4 million, marking a 2.5% increase from last year.
Why the Increase?
Many sellers who held off due to market uncertainty—especially around election season—are now ready to list their homes. This will bring more inventory to the market, creating new opportunities for buyers while keeping demand steady.
Home Prices: Continued Appreciation
Even with more homes becoming available, inventory levels remain tight, keeping home prices on an upward trend. Experts forecast a 3.1% appreciation rate for 2025, meaning property values will continue to grow at a steady pace.
What This Means for Sellers
If you’re considering selling, now is a great time to capitalize on your home’s value. Demand remains strong, and with prices rising, you could see a solid return on your investment. The key to maximizing your profit? Working with an experienced real estate professional to navigate the market effectively.
The Bottom Line
For buyers, now is the time to get ahead of the competition before mortgage rates drop further and more buyers flood the market. For sellers, 2025 presents a strong opportunity to list your home and take advantage of rising prices.