If you’re in the market for a home this year, you’ll want to keep your eye on a few things: mortgage rates, home prices, and home availability. Let’s see what the experts have to say about the future of the housing market.

Mortgage Rates Will Fall Slightly

First, the not-so-wonderful news: nobody expects a return of the historically low mortgage rates of 3% to 4% during the COVID-19 pandemic. The good news is that today’s attractive rates look steady and on a slightly downward trend.

Most experts agree that over the course of 2025, mortgage rates will settle in the mid-to-low 6% range. The National Association of Home Builders takes the rosiest view with a 6.12% forecast; Redfin is on the other end of the spectrum with a 6.8% prediction.

Most homebuyers, however, have mortgage-rate wishes that aren’t likely to get granted in 2025. A recent U.S. News survey found that 85% of homebuyers want rates to go below 6% before they enter the market. For those who wait, patience may not pay off.

Home Prices Will Rise Slightly

With mortgage rates easing, prices are expected to tick up. Most experts forecast a slow, normal rise in prices of U.S. homes over 2025. How high will prices rise? On average, the consensus prediction lands at a 3% appreciation in home prices.

Here, experts have less unanimity than mortgage-rate predictions. Freddie Mac doesn’t think home prices will rise much at all, forecasting just a 0.6% increase. Wells Fargo is on the far end of the forecast scale and predicts that home prices will go up 4.9% in 2025.

A few outliers think home prices will be lower in 2025: Moody’s Analytics forecasts a 0.4% price reduction, and Morgan Stanley predicts a 2% drop in home prices. Norada Real Estate Investments predicts a slight decrease in home prices in the Dallas market.

More Homes Will Hit the Market

Mike Simonsen, founder of Altos Research, says, “We’ll probably finish 2025 with 15% more homes available.” Realtor.com predicts an 11.7% increase in the number of homes for sale in 2025. This increased housing inventory helps to keep prices stable.

What does that mean for homebuyers? More inventory means more choices, fewer bidding wars with less competition, and more negotiating power for the buyer.
Rising inventory and easing mortgage rates make 2025 a good time to buy a home.

Will 2025 be the year you move into your dream home? To talk about making that happen, contact a member of our team at (972) 591-3097 or connect with us online.