2025 Home Prices: What to Expect

One of the big questions being asked about 2025 real estate is if the prices of homes will finally drop. While we really want the answer to be a resounding, “Yes” …it is more likely…no. Here’s why:

Housing Inventory and its Impact on Home Prices

The connection between the number of homes on the market and the prices of homes is one that can’t be overlooked. Right now, there are more people that want to buy a home than there are homes on the market. The home demand versus supply is still not balancing out enough to lower housing prices.

This means that until more homes are for sale, there is still high competition—so there’s no reason for prices to drop. However, does this mean home prices continue to go up?

Home Price Predictions for 2025

Most real estate experts agree home prices will continue to rise in 2025, however at a much more normal rate. Over the last couple years, the housing market saw a crazy jump in home prices. Now it’s time for that type of acceleration to slow down.

According to Forbes.com, “Although home prices continue to break records, they’re rising at a slower pace due to loosening inventory and sluggish demand—and experts project further price growth deceleration in 2025.”

Home Sales Predictions for 2025

There are so many factors that will impact the number of homes listed and sold in 2025. Optimistically, with the home prices not increasing as much, and more buyers ready to enter the market, we could see more houses for sale in 2025.

Zillow.com predicts “…4.3 million sales of existing homes in 2025, up slightly from the 4 million expected to sell in 2024. The combination of lower rates and an uptick in the number of for-sale listings could help make even more markets affordable for buyers, provided that incomes keep pace. A calmer market could also make it easier for buyers to budget for a down payment instead of playing catchup when values escalate rapidly.”

No Matter the Market, Be Prepared

In real estate, the national trend may not be exactly what is happening in your area. You may live in a town where there’s a lot of inventory available. Or perhaps you’re seeing some home prices drop locally. If so, that’s great…and hopefully we see more of that spreading across the country. But if you’re in an area where the inventory of homes is still lacking and prices are still climbing, it’s very important you work with a real estate expert who understands the ins-and-outs of the local market. They know how to help you navigate the real estate changes, and also best prepare you for what’s to come.

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