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As you look ahead to 2025, you may be thinking this is the year you’ll buy your first home. You could have slightly better home options and prices than in the last few years, however, mortgage rates are expected to remain elevated, though the rates may moderate somewhat. That’s what various economists and housing experts are saying in their predictions for the housing market in 2025.
Home prices increase slower
Forecasts from Realtor.com, Redfin, and the National Association of Realtors predict home prices will increase between two to four percent in 2025. Prices rose four percent this year. The National Association of Realtors forecasts the median home price nationally in 2025 will be $410,700. That’s up two percent over 2024.
More homes for sale
You may see more homes on the market with inventory of both new and existing homes increasing. The forecast from Realtor.com predicts the supply of homes for sale will rise 11.7 percent in 2025. New home construction nationally is expected to increase nearly 14 percent from 2024. Housing experts say you may also see more home listings with price reductions.
Mortgage rates moderate but remain elevated
The average 30-year fixed-rate mortgage rate has been between 6.08 percent to 7.44 percent through 2024 according to Freddie Mac. Economists with the National Association of Realtors predict rates should stabilize toward the low end of that range in 2025. Realtor.com is also predicting rates averaging 6.3 percent through next year.
How you can prepare
You can prepare for whatever the housing market does in 2025. A great place to start is to compare the pros and cons of homeownership versus renting. It can also be helpful to understand the true costs of homeownership. You can find this information, along with helpful next steps, in the in the steps to homeownership section of CHFA’s website.
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