Published July 26, 2025

🏡 Housing Forecast 2025: What Buyers & Sellers Need to Know

Written by David Ponce

🏡 Housing Forecast 2025: What Buyers & Sellers Need to Know

1. Mortgage Rates Remain Elevated — But May Ease Slowly

Average 2025 rate: About 6.7% on a 30-year fixed mortgage.
By year-end: Rates may dip modestly toward ~6.4% Realtor+14Realtor+14Realtor+14.
Recent levels: Currently fluctuating in the high‑6% range (~6.7%–6.75%) throughout mid‑2025 Realtor.

2. Home Prices: Still Rising, But More Slowly

2025 growth forecast: Median prices expected to rise ~2.5% year-over-year Financial Times+15Realtor+15Realtor+15.
Compared to earlier outlooks: This represents a downshift from prior projections of ~3.7% PR NewswireRealtorRealtor.

3. Sales Trends: Subtle Shift Toward Buyer Balance

Expected total sales in 2025: Around 4.00 million—about 1.5% below 2024 levels Realtor+4Realtor+4PR Newswire+4.
Market conditions: A softening environment is prompting more price reductions, concessions, and longer listing times The Sun+5Realtor+5Business Insider+5.

4. Inventory Is Rising — Fastest Growth Since 2019

Active listings expected to rise ~16.9% YoY, up from prior forecast of ~11.7% Realtor+1PR Newswire+1.
Current supply levels: Supply now average ~4.6 months—transitioning from a seller’s market to a more balanced landscape PR Newswire+1Realtor+1.

5. Affordability: Stabilizing—but Still a Challenge

Share of income spent on typical mortgage: Expected to decline slightly to ~29.2% in 2025, down from ~30.1% in 2024 Realtor+1Realtor+1.
Rental market: Rents remain nearly flat or easing slightly (-0.1% YoY)—keeping renting a viable short-term option Realtor+1Realtor+1.

🔍 What This Means for You

Role	What to Expect & Consider
Buyers	More options and negotiating power, but tight affordability persists. Lock in plausible rates now rather than waiting for modest declines.
Sellers	Buyers are more price-sensitive—listings take longer, and pricing strategy is savvy. Consider price improvements or incentives to seal deals.
Renter/Delayer	Renting remains reasonable—saving you time to plan, save, and adapt to changing affordability.

🧠 Key Themes to Watch

Policy and trade dynamics (tariffs, fiscal decisions) could influence inflation and rates, potentially affecting homebuilding costs and availability Business InsiderBusiness Insider+3Realtor+3MarketWatch+3.
Economic shifts: Any slowdown may reduce rates slightly but also suppress buyer confidence and demand—potentially slowing sales further Business InsiderKiplinger.
Rate-sensitive behavior: Survey data suggests that if rates slip to ~6%, millions of new buyers may enter the market, spurring activity amid pent-up demand New York Post.

📌 Summary

The 2025 housing market is shifting toward a more buyer-balanced environment: increased supply, slower—but steady—price growth, and mortgage rates hovering in the mid/high‑6% range. While affordability remains constrained, small improvements may offer opportunities for well-prepared buyers. Sellers will need to adapt to more competitive dynamics, and renters may find value in staying flexible. Staying informed on rate trends, regional conditions, and sales timing will be key for navigating this evolving landscape.

Further reading on housing & mortgage trends