If you’ve been keeping an eye on the market, you’ve probably seen some changes happening this year. So, what’s coming next? From home prices to mortgage rates, here’s a look at what experts are predicting for the rest of 2025—and what these shifts might mean for you.

Will Home Prices Fall?

A lot of buyers are hoping home prices will drop soon. Recent news about prices dipping in a few areas has some people thinking a bigger decline is just around the corner. But let’s take a look at the facts.

Home price increases are slowing, but that doesn’t mean a crash is coming. As the NAHB points out:

“House price growth slowed . . . partly due to a decline in demand and an increase in supply. Persistent high mortgage rates and increased inventory combined to ease upward pressure on house prices. These factors signaled a cooling market, following rapid gains seen in previous years.”
— NAHB

Experts agree that despite the slowdown, home prices across the country are still anticipated to increase this year. On average, eight top forecasters predict a rise of about 1.5-2% in 2025.

So, if you’re hoping for a big price drop, experts say that’s probably not going to happen.

While a few markets have started to see prices drop a bit, the average decrease is only about 3.5%. That’s nothing like the nearly 20% plunge we saw during the 2008 crash.

On top of that, these minor adjustments hardly seem like a big deal when you look at how much home prices have soared in recent years. According to data from the Federal Housing Finance Agency (FHFA), prices across the country have jumped 55% compared to just five years ago.

Here’s the bottom line: home prices aren’t dropping. They’re still on the rise, just not as fast as before. Some experts think prices might level off by the end of the year. But keep in mind, this can look different depending on the local market, with some areas seeing small ups and downs. That’s why it’s smart to work with a real estate professional who knows the latest trends where you live.

Will Mortgage Rates Come Down?

A lot of buyers today think, "I'll just wait for interest rates to go down." But is that really the best move? According to Yahoo Finance:

Rephrase it in a conversational way “If you’re looking for a substantial interest rate drop in 2025, you’ll likely be left waiting. The latest news from the Federal Reserve and other key economic data point toward steady mortgage rates on par with what we see today.”
— Yahoo Finance

Rather than trying to predict the perfect moment or waiting for rates to fall—which might not happen—it's better to focus on the current market. Most experts expect rates to stay in the 6% range, with forecasts pointing to them stabilizing around the mid-6% mark by the end of this year.

That’s not a huge shift from where things are today. So, if you’re thinking about moving, let’s chat about how to make it work and what to keep an eye on. While rates might not be as low as you’d like, don’t delay your plans waiting for something the numbers suggest probably won’t come around.

Having a pro on your side who’s staying up-to-date on the economic factors that affect mortgage rates is going to be really important this year. Since things like inflation and other key elements can change how rates shift, keeping an eye on them will make a big difference.

The Takeaway for Buyers and Sellers

If you're buying, selling, or considering both, you need a solid plan rather than just guessing. Home prices are still going up across the country, but at a slower pace, and interest rates are expected to stay steady. Overall, the market is settling into a more balanced phase, not a crash.

Bottom Line

If you're thinking about making a move, the smartest approach is to concentrate on your own situation instead of getting caught up in the headlines. Team up with a real estate expert who understands our local market and can help you navigate its changes.

Let’s chat about what’s going on in our area so we can come up with a plan that fits your needs.