Making predictions for the year ahead is always a challenge, and housing market analysts can also misjudge trends that seem clear in December but shift dramatically by the time spring arrives.

However, it’s beneficial to understand what industry experts anticipate, especially when there’s a shared outlook for 2025. With that in mind, we compiled insights on key housing market topics, including mortgage rates and sales volume.

In summary, although we shouldn’t expect significant growth next year, minor improvements in the real estate market are expected.

What to Expect for Mortgage Rates in 2025

According to Redfin, a national brokerage, “Mortgage rates are predicted to stay in the high-6% range across 2025, averaging around 6.8% throughout the year, although they may vary weekly.”

Experts from Fannie Mae and Pulsenomics, LLC anticipate “mortgage rates will stay high but may slightly decline during the year to about 6.3%.”

Realtor.com predicts a yearly average rate of 6.3%.

The Mortgage Bankers Association expects rates to hit an average of 6.4%.

Predictions for Home Prices in 2025

Redfin forecasts a 4% increase in the median sale price for homes.

The Fannie Mae/Pulsenomics report predicts a gain of 3.8%.

Zillow sees home values growing by 2.6% in 2025.

The Mortgage Bankers Association expects an increase of only 1.5%.

Are Home Sales Expected to Increase in 2025?

The Mortgage Bankers Association foresees a 5.1% rise in home sales next year.

Zillow predicts a 7% increase in sales.

The economic experts at Fannie Mae expect a bump of 4.2%.

The National Association of Realtors has an even more optimistic outlook, predicting a 9% increase in sales.

Miscellaneous Predictions

Redfin’s experts believe “Mayors in Blue Cities will contribute to reversing the trend of people leaving urban areas.” They highlight newly elected mayors in cities like San Francisco and Portland, who are implementing pro-business and strong-on-crime initiatives. “These political changes, alongside many major companies—including those in the tech sector—bringing workers back to their offices, could lead to a shift back toward major coastal cities.”

In another prediction, Zillow forecasts that rental properties will increasingly adopt pet-friendly policies. “As renters age, they are not delaying traditional milestones such as cohabitation or getting a pet until after buying a home,” they state. Currently, 58% of renters have pets, a rise from 46% before the pandemic, with many indicating they have rejected rental options due to no-pet policies.

Moreover, the Realtor.com team believes “2025 will be the most favorable market for buyers since 2016.” They highlight that the inventory of available homes is anticipated to be the highest it has been since just before the onset of the pandemic.

Experts estimate there will be a supply of 4.1 months of homes available in 2025, explaining that “a supply under 4 months typically indicates a seller’s market, whereas 4 to 6 months is generally seen as a balanced market.” (A market with over 6 months’ worth of inventory is considered a buyer’s market, which doesn’t appear likely anytime soon.)