Making predictions for the coming year can be challenging, and even housing market specialists can find their forecasts falling short by the beginning of the next year.

Nevertheless, it’s valuable to consider insights from industry professionals, especially when there seems to be a shared understanding of what trends may emerge in 2025. Here, we’ve gathered insights on various critical topics concerning the housing market, including interest rates and sales volumes.

In summary, while a housing boom isn’t expected next year, minor improvements in the property market are anticipated.

Predicted Mortgage Rates for 2025

The strategists at Redfin, a national real estate brokerage, predict that “mortgage rates are expected to hover around the high-6% range throughout 2025, with the yearly average sitting around 6.8%.” The rates might fluctuate weekly but will likely stabilize within this range.

Experts from Fannie Mae and Pulsenomics, LLC foresee that “mortgage rates will remain high, but expect a modest decrease to about 6.3% over the year.”

Realtor.com estimates that the full-year average mortgage rate will be approximately 6.3%, while the Mortgage Bankers Association predicts an average rate of 6.4%.

Home Price Predictions for 2025

Redfin anticipates an increase of 4% in the median home-sale price.

The joint forecast from Fannie Mae and Pulsenomics anticipates a gain of about 3.8%.

Zillow expects home values to rise by 2.6% in 2025.

On the other hand, the Mortgage Bankers Association projects a more modest increase of just 1.5%.

Sales Forecasts for 2025

The Mortgage Bankers Association expects home sales to increase by 5.1% next year.

Zillow has a slightly more optimistic forecast with a 7% increase.

The Fannie Mae economics team predicts a 4.2% growth in home sales.

The National Association of Realtors estimates a notable leap of 9% in sales.

Miscellaneous Predictions

Redfin’s analysts theorize that “Blue City mayors could help turn the tide against the outflux from urban areas.” They point to newly elected mayors in places like San Francisco and Portland, Oregon, who are implementing business-friendly, crime-reducing policies. “These political moves, combined with many major companies—particularly in tech—bringing employees back to the office, may reverse the trend of leaving large coastal cities.”

Zillow’s forecast highlights that pet-friendly amenities will become essential for rental property managers. “As renters mature, they are no longer delaying important life choices such as cohabitating or adopting a pet before purchasing a home,” they note. Currently, 58% of renters own pets, up from 46% prior to the pandemic, and many have often chosen to skip properties that do not allow pets.

Additionally, Realtor.com claims that “2025 is poised to be the most favorable market for buyers since 2016.” They expect the inventory of houses available for sale to hit its highest level since just before the pandemic.

Realtor.com estimates that there will be around 4.1 months’ worth of homes available on the market in 2025. They explain that “a supply of under 4 months indicates a seller’s market, whereas 4 to 6 months typically signifies a balanced market.” They add that inventory exceeding 6 months is generally seen as a buyer’s market, which doesn’t seem likely anytime soon.