The 2025 Real Estate Predictions You Need to Know

The 2025 housing market is poised for a big shift. What we thought would happen with mortgage rates and inflation isn't exactly what we'll see in 2025. 

First and foremost, buyers should expect to see higher mortgage rates. ResiClub recently compiled mortgage rate forecasts from 14 different firms and on average, mortgage rates are projected to reach 6.34% by the end of 2025. 

This is a significant change in the predictions published just before the Fed’s rate cut in September. The majority were expecting rates to slowly decline throughout 2025 and fall below the 6% threshold by the end of Q4. Now, most forecasters are expecting mortgage rates to close 2025 at an average of 6.34%.

This means affordability will remain a key hurdle for buyers, despite improvements seen from rising wages and tax breaks.

At the same time, buyers can expect to see more listings with price cuts. About 20% of active listings now feature price reductions, which means new opportunities for negotiation.

Sellers in 2025 should be prepared for a more balanced market. The Seller’s market dominance is slowly fading and could require more competitive pricing and buyer incentives.

In 2025, home prices will continue to rise, so homeowners should expect to see continued growth in their home investment.

That's all for this week's market snapshot! Get all your real estate news and SoCal  recommendations by clicking Subscribe.