If you’ve been keeping an eye on the housing market, you’ve probably noticed a few shifts already in 2025. The big question is: what comes next? From home prices to mortgage rates, here’s what experts are forecasting for the rest of the year—and what those changes could mean for you.
Will Home Prices Drop?
It’s no surprise that many buyers are hoping for lower home prices. With recent news about price declines in certain areas, some are wondering if a larger correction is right around the corner.
Here’s the reality: while price growth is slowing, that doesn’t mean we’re on the verge of a housing crash. The National Association of Home Builders (NAHB) puts it this way:
“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.”
In other words, the market isn’t collapsing—it’s rebalancing.
Keep in mind, while some areas are seeing slight price declines, the average dip is only about -3.5%. That’s nothing compared to the nearly 20% drop the market went through during the 2008 crash.
And those modest declines are quickly outweighed by how far prices have risen in recent years. According to the Federal Housing Finance Agency (FHFA), home values are still up 55% nationally compared to just five years ago.
The bottom line: prices aren’t crashing. They’re expected to continue rising—just at a slower pace. Some experts even predict they may level off by the end of 2025. Of course, this will vary depending on your local market, so it’s always smart to connect with a trusted real estate professional who can give you the latest insights in your area.
Will Mortgage Rates Finally Drop?
Another big question buyers are asking is: Should I wait for rates to come down before I buy?
Here’s the reality—probably not. 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.”
Translation: it’s risky to try to “time the market.” Waiting for lower rates that may never arrive could mean missing out on the right home altogether.
And that outlook isn’t much different from where rates stand today. So, if you’re planning a move, let’s focus on how to make it work for you and what factors you should be watching. While mortgage rates may not be as low as you’d like, putting your plans on hold in hopes of a drop that’s unlikely could mean missing the right opportunity.
That’s why partnering with a real estate expert who tracks the economic drivers behind mortgage rates—like inflation and other key indicators—is so important. Having someone who understands how these shifts impact buyers and sellers can make all the difference.
The Takeaway for Buyers and Sellers
Whether you’re buying, selling, or doing both, today’s housing market calls for strategy, not guesswork. Home prices are still rising nationally (just at a slower pace), and mortgage rates are expected to hold steady. Overall, the big picture is one of moderation—not meltdown.
Bottom Line
If you’re considering a move in 2025, your best bet is to focus on your own needs and timeline, not the headlines. Work with a trusted real estate professional who can help you navigate your local market with confidence.