5 real estate predictions for 2025 that every buyer and seller must know.
What can we expect in the real estate market in 2025? Last year didn’t go as expected, especially with the promised interest rate cuts. While we got a few reductions, they didn’t bring rates down as much as we had hoped.
With that in mind, I’m sharing my top five predictions for the real estate market in 2025. These are based on what we’ve seen recently and where the trends seem to be pointing.
1. Interest rates staying in the 6% range. Interest rates are a big one. While we’ve heard they might drop, they often don’t go as expected. I think we’ll stay around 6% this year. If they hit 5%, that could energize the market, but it’s best to expect things to stay steady.
2. Inventory will remain steady but uneven. Inventory will likely stay around a two to three- month supply most of the year. Spring might see a slight dip as the market heats up, but overall, I don’t expect big changes. Well-priced, well-kept homes will sell fast, while overpriced or fixer-uppers may sit longer. Sellers: focus on showing value to buyers.
3. Buyer demand will remain high but picky. The buyer pool is strong, but buyers are being more selective. They’re skipping homes that don’t meet their standards, whether it’s price, condition, or value. This trend from 2024 is likely to continue. If you’re selling, make sure your home is priced right and in good condition to stand out.
4. Home appreciation will be modest at 1% to 4%. In 2025, we expect a modest appreciation of around 1–4%. It’s not as high as the double-digit gains from the past, but it’s sustainable and healthy. Big price jumps are unlikely unless interest rates drop a lot, which could bring back affordability issues. For now, a steady rise in home values benefits both buyers and sellers.
5. Affordability will remain challenging. Affordability is still tough for buyers. High payments, expensive insurance, and the rising cost of living are making it harder for them to justify big purchases. If you’re selling, keep in mind that buyers are being extra cautious
So, there you have it! These are my predictions for 2025, but the question is will they all come true? Only time will tell, but these trends seem likely based on what we’re seeing now.
Thinking of buying or selling this year? Please call or email me! I’m here to help you navigate the market and make the most of the opportunities ahead. Let’s make 2025 a successful year for your real estate goals.
