Planning to buy a home in 2025? Here’s some tough news: housing prices are expected to go up, and experts are predicting steady growth throughout the year. If you’re renting, though, you might catch a break.
Home Prices Are Climbing
According to Redfin, home prices will rise by about 4% next year, continuing the upward trend we’ve seen in 2024.
Realtor.com agrees but predicts a slightly smaller increase of 3.7%. While there will be more homes on the market (an 11.7% increase in inventory, says Realtor.com), it likely won’t be enough to meet demand. That means prices will stay high, keeping homeownership out of reach for many Americans.
Mortgage Rates: No Big Relief
Mortgage rates aren’t expected to drop much in 2025 either.
Realtor.com thinks rates might dip to the low 6% range by the end of the year, but Redfin says they’ll probably stick closer to 7%.
Rising home prices mean monthly mortgage payments will stay expensive, even if rates come down a little.
Policies from the new presidential administration could make things even more uncertain.
Tariffs or tax cuts might push rates higher, while a weaker economy could pull them lower.
For now, though, buyers should brace for rates staying about where they are.
Good News for Renters
If you’re renting instead of buying, 2025 might be your year. Rents are expected to stay flat or even drop slightly, thanks to an increase in available apartments.
Rising wages and more rental options give renters the upper hand, with some landlords likely to offer perks like discounts or free amenities to fill their units.
What It All Means
For buyers, 2025 could feel like an uphill climb with rising prices and stubborn mortgage rates.
But for renters, it’s shaping up to be a more affordable year.
Whether you’re saving up for a home or sticking with renting, planning ahead will be key to making the most of the housing market next year.