If you've been following the housing market this year, you've probably noticed some changes already. So, what’s ahead? From pricing trends to interest rates, here’s what industry experts are forecasting for the rest of 2025—and how it could impact your buying or selling plans.
Are Home Prices Going To Drop?
Many buyers are hoping for a price dip, and recent headlines showing declines in certain markets are fueling that hope. But here’s what the data really says.
While the rapid growth of the last few years is easing, that doesn’t signal a major decline. As NAHB explains:
“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. These factors signaled a cooling market, following rapid gains seen in previous years.”
That cooling means price growth is moderating—not reversing. According to the average of 8 leading industry forecasts, national home prices are still expected to rise 1.5–2% in 2025 (see graph below):
So, if you're waiting for a crash, the experts agree: it’s not happening.
Even in the markets where prices are softening, the declines are minor—averaging around -3.5%. That’s nothing compared to the nearly 20% drop during the 2008 housing crisis.
And when you zoom out, home values have soared. According to the Federal Housing Finance Agency (FHFA), prices are up 55% nationally compared to five years ago.
Bottom line: Prices may rise more slowly this year, but they’re still going up overall. Some local areas may see slight drops or flat pricing, but a nationwide downturn isn’t expected. Connect with a local real estate expert to understand what’s happening in your specific market.
Will Mortgage Rates Finally Drop?
Another common strategy among buyers is to wait until mortgage rates fall. But that might not be the most effective plan.
As Yahoo Finance explains:
“If you’re looking for a substantial interest rate drop in 2025, you’ll likely be left waiting. The latest news from the Federal Reserve and other key economic data point toward steady mortgage rates on par with what we see today.”
In short, rates are likely to stay where they are. Most experts say rates will remain in the 6s, and current projections have them settling in the mid-6% range by the end of this year (see chart below):
So, if you're putting your plans on hold for significantly lower rates, you may be waiting longer than expected—and potentially missing out on other opportunities.
Instead, it might be smarter to evaluate your goals based on today’s conditions. Waiting could mean facing more competition or even higher prices later on.
Also keep in mind that economic factors like inflation or shifts in the job market can still influence future rate movements. That’s why working with a professional who tracks those trends can give you an edge.
What This Means for Buyers and Sellers
Whether you're planning to buy, sell, or both, this market calls for a clear strategy. Prices are still rising—but more slowly. And interest rates are expected to remain fairly stable.
So, the story isn’t doom and gloom. It’s balance.
Final Thoughts
The best move? Focus on your own needs, not the headlines. Talk to a local real estate professional who can help you make smart, informed decisions in today’s evolving market.
Let’s connect and discuss what’s happening in our area so we can create a plan that fits your goals.
The information and opinions in this article are not investment advice. Tim Stice makes no guarantees about accuracy or completeness. Always do your own research and consult a professional before making financial decisions. Tim Stice is not liable for any loss or damage resulting from reliance on this content.
