The housing market is poised for a potential rebound in 2025, with industry experts expressing cautious optimism about rising inventory and stabilizing mortgage rates. After two years of sluggish sales, there are signs that both buyers and sellers may see improved opportunities in the new year.
The National Association of REALTORS® (NAR) forecasts a 7% to 12% increase in existing-home sales in 2025, coupled with a 2% rise in median home prices, bringing the national median to $410,700. Stabilizing mortgage rates near 6%—a significant improvement from the highs of 7% in recent years—are expected to open the door for approximately 6.2 million more prospective buyers.
“Home buyers will have more success next year,†says Lawrence Yun, NAR’s chief economist. “The worst of the affordability challenges are over, as more inventory, stable mortgage rates, and continued job and income growth pave the way for more Americans to achieve homeownership.â€
Housing inventory, a key market driver, is projected to see a substantial increase, spurred by new home construction and motivated sellers. Listings have already risen by about 20% annually, and this growth is expected to continue in 2025. Builders are also ramping up efforts to meet demand, focusing on affordable options such as townhomes.
While home prices are set to rise modestly, this stabilization, combined with income growth and increased inventory, could create a more balanced market. For buyers and sellers alike, the 2025 housing market holds promise for renewed activity and opportunity.
As Yun aptly notes, “A housing market that is better balanced works better for everyone.â€
