Housing market 2025

Yes, housing inventory has increased for 21 straight months, and, Yes, prices have essentially remained stable, but NO, no one is buying.

Add to that the fact that builders are cutting back on new construction and it all adds up to Going Nowhere.

Many experts cite a divide between expectations and reality on the parts of both buyers and sellers. They expect that, over time, mortgage rates will come down, sellers will modify their prices, inventory will continue to increase and builders will resume new construction.

This will undoubtedly be the first of many housing market forecasts for 2025 and – surprise! – the outlook is mixed, as they say.

Starting with mortgage rates, it’s believed they will hover around 6.3% in 2025. A bit disappointing, to be sure, but better than the current 6.7%.

And, staying with disappointing (at least for buyers), home prices are projected to increase by 3.7% next year, down a bit from the 4% rise in 2024.

And, finally, a bit of good news! The supply of homes is expected to rise by 11.7% in 2025 with new home construction adding 1.1 million units next year.