Elevated mortgage rates, pent-up supply and demand, increased home sales, and broader economic uncertainty are on the cards in 2025, according to housing market forecasts from Bright MLS, Realtor.com, and Redfin. Additionally, the new administration is expected to drive down regulatory costs and new housing starts are expected to be positive in the 2025 calendar year.
The sweeping forecasts for 2025 include mortgage rate projections, home price appreciation estimations, and predictions on whether 2025 will be a renter’s, buyer’s, or seller’s market.
Home Prices
Bright MLS, Realtor.com, and Redfin form a consensus that home prices will rise between 3% and 4% annually in 2025. Realtor.com projects home prices will increase 3.7% while Redfin expects the median U.S. home-sale price to end 2025 4% higher than in 2024. According to Redfin, prices will rise at a pace similar to the second half 2024 “because there will not be enough new inventory to meet demand.”
Bright MLS projects median home prices will increase 3.1% to $418,390, with “no major risks evident” in the economy or housing market that could lead to a drop in home prices during the 2025 calendar year. In some markets, though, a rise in inventory and “historically fast price growth” will dampen 2025 price expectations.
Mortgage Rates
The three organizations each project 30-year fixed-rate mortgages will average between 6% and 7% in 2025, though continued fluctuations are also expected. Bright MLS projects average rates of 6.4% for the full year, with mortgage rates in the high-6s in the first half of the year and low-6s in the latter half of the year. Inflation risks from the Trump administration, including tariffs and immigration policy, could contribute to rates remaining elevated, according to Bright MLS.
Realtor.com anticipates mortgage rates will average 6.3% in 2025 while Redfin project rates will average 6.8% in 2025. Rates could decline more significantly if the economy weakens or if plans for tariffs and tax cuts are dialed back by the new administration.
Home Sales, Inventory, and Starts
Each organization projects there will be more home sales in 2025 than in 2024. Bright MLS forecasts existing-home sales will increase 7.5% year-over-year and inventory levels will increase 12.5% compared to 2024. Buyers will perceive rates above 6% as “the new normal,” and many who have been on the sideline will engage in the housing market in 2025, according to Bright MLS.
Realtor.com forecasts existing-home inventory will increase 11.7%, home sales will grow 1.5%, and months’ supply will improve to 4.1 months in 2025 from 3.7 months in 2024. Additionally, Realtor.com projects single-family housing starts will grow 13.8% year-over-year, reaching 1.1 million homes.
Despite increase inventory and expectations that sales growth will be positive in 2025, Redfin forecasts 2025 may be a renter’s market. The projection is rooted in the expectation that the cost of homeownership will continue to rise while rental affordability will improve. Additionally, there will be more new rentals coming on the market in 2025, creating more supply than demand and potentially motivating landlords to offer concessions to entice renters, Redfin projects. Gen Z individuals will likely favor living with family or renting well into their 30s, opting to build wealth in other ways, according to Redfin’s projections.
New Presidential Administration
Realtor.com anticipates the victory of President Trump as well as the Republican sweep of both houses of Congress will result in “pros and cons for the housing market.”
“While President-elect Trump can work quickly with his administration to implement some regulatory changes, other policies that will affect housing, such as tax changes and broad deregulation, require the cooperation of other branches and levels of government,” says Realtor.com chief economist Danielle Hale. “The size and direction of a Trump bump will depend on what campaign proposals ultimately become policy and when. For now, we expect a gradual improvement in housing market dynamics powered by broader economic factors. The new administration’s policies have the potential to enhance or hamper the housing recovery, and the details will matter.”
Redfin projects that fewer construction regulations will lead to more building in 2025, though it will take longer for the increase in activity to improve affordability. The organization suggests the Republican sweep will improve builder confidence that regulatory burdens may ease during the Trump administration. Additionally, mergers and acquisitions among large companies may be more common as the Federal Trade Commission is likely to approve more deals, Redfin projects. As a result, the consolidation seen in recent years in the real estate industry is likely to continue in 2025.
However, the potential crackdown on immigration promised by the Trump administration could have a significant negative impact on residential construction activity, according to Redfin.
Regional Differences
Higher-income households and higher-cost markets, such as Boston, New York, and Washington, D.C., are projected to fare better than other markets in 2025, according to Bright MLS. The markets most at risk of slow price growth in 2025 are areas where price rose significantly more quickly than the rest of the country between 2021 and 2024 (Tampa; Buffalo, N.Y.); where inventory gains have outpaced other markets (Orland, Denver, Miami); where employment has declined in the region (Detroit, Minneapolis, Salt Lake City); and where current median home prices are more than ten times higher than per capita income (San Diego, California).
“Higher-income households and homeowners will likely fare better in the 2025 housing market than will entry-level and moderate-income buyers,” says Bright MLS chief economist Lisa Sturtevant. “Metros where overall household incomes are lower are more at risk of a weakening housing market, while higher-income metros—even those where home prices are very high—are projected to see stronger price growth.”
