2025 Housing Market Predictions: Here’s What’s in Store

The new year is upon us, and the ups-and-downs of the 2024 housing market are now in the past. So, what’s next for real estate in 2025? Here are the are the top predictions for what’s in store for buyers, sellers and real estate professionals in the year ahead:

Home Prices May Continue to Rise—But Not Like Before

Home prices over the last few years felt like they went from 1-100 in record speed. In 2024, we saw some slowing down and experts are predicting we will see more of the same in 2025.

According to Zillow.com, “Home values nationally are forecast to grow by 2.6% — a softening that would be welcome news for financially stressed buyers. The forecast is based on the assumption that interest rates will stay around 6.5%, and that more sellers will list their homes for sale.”

And with more homes being predicted to go on the market this year, there could be some relief for buyers with more inventory and home prices not soaring. However, not all markets will see the same impact. This is why it’s so important buyers and sellers worked with experienced agents in the areas they are looking to buy in so they can navigate any unique market changes.

To learn more about the prices of homes in 2025, click here.

Mortgage Rate Stability and Perhaps Even a Drop

We’ve discussed mortgage rates at length over the last year, in fact most of the real estate industry has. However, this is one topic that will never get old. I think it’s safe to say we are all coming out of the COVID-era real estate fog where rates were the lowest in history and we saw a market boom no one could have predicted. With that being said, many buyers and sellers and still “holding out” for rates to lower before they make a move.

What we saw in the last year was a stabilizing of the mortgage rates—especially when we saw them go down from over 7% to around 6%. That sparked some life into some of the buyers who were waiting for a “change.” We also saw the election slow the market down—along with the fall and winter months—however now many buyers and sellers are feeling more confident and gearing up to list or buy in the next few months.

According to Zillow.com, “Volatile rates offer risk and opportunity. Even small changes in interest rates can have an impact on the size of your mortgage payment, so serious buyers — especially those in expensive markets — should keep an eye on rates to see how it affects not only their future mortgage payment but how much they can comfortably spend on a home.”

The Latest Technology in Real Estate Will Remain a Must

One thing that isn’t new, but will continue to rule the real estate marketplace, is technology. Buyers and sellers are busier than ever and their need for instant communication and ease of processes is high.

For real estate professionals, this means you should be partnering with companies that help you streamline the homebuying experience for your clients. For example, remote online notarization for closings is becoming the new norm. Be sure you’re working with a title company, like Velocity Title, that can help you and your clients safely and conveniently purchase their new home through just their computer!

Real estate professionals also need to make sure their website, social media, video and text strategies are dusted off and ready for the year ahead. Did you know AI and chat bots are a big thing now for real estate websites? Learn more here.

Smaller Homes May Be the New Big Thing

Inflation rocked all of us in 2024, and most people have learned through this process that sometimes less is more. In real estate, experts are seeing a new trend where smaller spaces are becoming more popular. The need for large open floor plans and great rooms isn’t as important to buyers as it once was. And that is in part because buyers are realizing smaller homes not only cost less to buy but also cost less to maintain.

According to Zillow.com, “What had become a euphemism for small or cramped is now a sought-after design trait, evidenced by the fact that for-sale listings that mention “cozy” jumped by 35% in 2024, according to a Zillow analysis of millions of home listing descriptions.”

Real estate professionals can be encouraged by this trend in 2025 and can potentially help some clients who were on the fence find their perfect “cozy” and affordable house this year.

Velocity Title Moves Your Business Forward in 2025

Velocity Title supports the real estate industry with a comprehensive line of title services that add value to each and every transaction. At Velocity Title, Our Personal Support Makes You Look Good Every Time! With a focus on the best CUSTOMER EXPERIENCE, Velocity Title incorporates leading title TECHNOLOGY and EXPERTISE into every transaction—enabling the final step in the home buying and investing process to be EASY, EFFICIENT and INFORMATIVE. For the perfect settlement experience every time, click here or contact us today!