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. 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. However, don’t get too hung up on those blips and reactions from the market as they happen. Focus on the bigger picture. This shift will likely bring more buyers and sellers back into the market, though. As affordability crunched buyers move off of the sidelines both inventory and competition among buyers will ramp back up. The takeaway? You can get ahead of that competition now. Lean on us 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 grow by an average of about 2.5% nationally in 2025 (see graph below):
This is far more manageable than the rapid price increases of previous years, which saw double-digit percentage growth in some markets. What’s behind this ongoing increase in prices? Again, it has to do with demand. As more buyers return to the market, demand will rise – but so will supply as sellers feel less rate-locked. More buyers in markets with inventory that’s still below the norm will put upward pressure on prices. If more homes are likely to be listed, supply will help keep price growth in check. This means that while prices will rise, they’ll do so at a healthier, more sustainable pace.
Of course, these national trends may not reflect exactly what’s happening here in Marin. Some areas might see faster price growth, while others could see slower gains. As Lance Lambert, Co-Founder of ResiClub, says:
“Even if the average national home price forecast for 2025 is correct, it’s possible that some regional housing markets could see mild home price declines, while some markets could still see elevated appreciation. That has been, after all, the case this year.”
Even the few markets that may see flat or slightly lower prices in 2025 have had so much appreciation in recent years – it may not have a big impact. That’s why it’s important to work with a local expert who can give you a clear picture of what’s happening where you’re looking to buy or sell. If you have any questions about how these trends might impact your plans, let’s connect. That way you’ve got someone to help you navigate the market and make the most of the opportunities ahead.
