Housing Market Forecasts for the Rest of 2025: What Buyers and Sellers Need To Know

If you’ve been keeping an eye on the 2025 housing market, you’ve likely noticed things are shifting—but not crashing. From home prices to mortgage rates, the second half of the year promises to bring a mix of stabilization and subtle movement. So, what’s really ahead, and how should you prepare?

Let’s break it down.

Are Home Prices Going to Drop in 2025?

It’s a common question among homebuyers: “Are prices finally going to fall?” While some markets have seen slight corrections, the overall national forecast says otherwise.

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.”

That means the rapid surges we saw in recent years are tapering—but not reversing entirely. In fact, a consensus from eight leading housing market forecasters shows home prices are projected to increase 1.5% to 2% nationally by year-end.

Here’s what that means for buyers and sellers:

• Buyers: Waiting for a significant drop may backfire, as no crash is on the horizon.

• Sellers: While price appreciation is slowing, you're still positioned to gain equity—just not at 2021’s lightning speed.

And even in markets where slight dips are happening, the average price decline is only around -3.5%—a far cry from the nearly 20% crash in 2008.

To add context, home prices have increased 55% nationally over the past five years, according to the Federal Housing Finance Agency (FHFA). So even if prices plateau, long-term value is still strong.

✅ Key takeaway: Home prices are stabilizing—not crashing. Expect slower, steadier growth through 2025.

What’s Happening with Mortgage Rates in 2025?

Many buyers are sitting on the sidelines, waiting for mortgage rates to drop—but is that strategy smart?

Yahoo Finance reports:

“If you’re looking for a substantial interest rate drop in 2025, you’ll likely be left waiting.”

Federal Reserve policy and inflation data suggest that rates will remain steady in the 6% range, with most projections placing them in the mid-6% range by year’s end.

So if you’re banking on a return to 3%–4% interest rates, don’t hold your breath. Instead, ask yourself:

• Can you afford to buy now based on your financial goals?

• Would a small drop in rates truly outweigh today’s inventory and pricing opportunities?

Trying to "time the market" can backfire. Instead, talk to a mortgage advisor and real estate professional who monitors rate trends, local conditions, and financing strategies to help you move forward confidently.

✅ Key takeaway: Mortgage rates will likely remain in the 6s. Focus on what works for your timeline—not the headlines.

What This Means for Buyers and Sellers in 2025

This year’s market is about moderation, not meltdown.

• For buyers: Affordability is still a challenge, but waiting may cost you more in missed equity or competition.

• For sellers: Home values are holding strong, especially in markets with tight inventory.

• For both: Success in 2025 is about strategic planning, not speculation.

Bottom Line

Whether you’re looking to buy, sell, or do both, the rest of 2025 will reward those who make informed decisions—not emotional ones.

📌 Home prices are still rising—just at a slower pace.
📌 Mortgage rates aren’t likely to drop significantly.
📌 Strategy beats timing in today’s market.

➡️ Ready to make your next move? Partner with a local real estate expert who understands how to navigate the nuances of today’s housing market. Your future home—and your financial strategy—deserve more than guesswork.

📲Want to see how much your home is worth in today's market? 👉 SellWithKhalid.com

📅Ready to schedule a home-selling consultation? 👉 Book a Zoom Call