In 2025, the housing market could see more homes available, but prices will likely stay high.
Here’s what experts say to expect for mortgage rates, new homes, and more.
Mortgage Rates Will Stay High
Mortgage rates are expected to stay above 6% through the end of 2025.
According to Realtor.com’s chief economist, Danielle Hale, rates will likely be in the low to mid-6% range.
Redfin’s economists think they might be even higher, close to 7%.
This means buying a home will still be tough, especially for first-time buyers.
Why? Lower mortgage rates could lead to more buyers entering the market, which could push home prices even higher, says real estate expert Josh Altman.
More New Homes on the Market
There will be more single-family homes being built, thanks to the high demand and homebuilders making profits, says Lawrence Yun, chief economist at the National Association of Realtors.
But there’s still a housing shortage, so not all of the demand will be met.
Fewer “Locked-In” Homeowners
Many homeowners are staying put because they have low mortgage rates, but this is expected to change a bit in 2025.
Currently, 84% of homeowners with a mortgage have a rate below 6%.
By the end of 2025, this should drop to 75%, meaning more people may start selling their homes.
Luxury Homes Are Still Hot
The luxury housing market is expected to keep growing in 2025.
Wealthy buyers are less affected by high mortgage rates, and they still see real estate as a valuable asset, says Mauricio Umansky, CEO of The Agency.
Rents Will Keep Going Up
With fewer people buying homes, more people are renting.
This higher demand for apartments, along with fewer new apartment buildings being built, will lead to higher rents.
Landlords will likely raise rents because more renters are staying longer.
Uncertainty in Real Estate Rules
The National Association of Realtors is dealing with some legal challenges.
The U.S. Justice Department is looking into practices in the real estate industry, which could change how things are done.
In short, 2025 will be another challenging year for homebuyers, with high rates and prices continuing to make it tough to buy.
But the housing market will keep moving, with new homes being built and rents going up.