Real Estate Market Trends in 2025

Where is the real estate market heading in 2025? We’ve done the homework! Check out our insights to understand what to expect for the market this year—predictions, trends, and how you can take advantage of any pitch 2025 throws you.  

What Top Economists Are Saying: Market Predictions 2025 

It’s been five years since the COVID-19 pandemic changed the world, ushering in a new era of suburban living, remote work, and for a time, the hottest housing market since 2006. And then? Stagnation. But finally, after a couple of years, things are returning to stable ground. So, now what?  

Economists predict a period of moderating mortgage rates, while home prices and sales both continue to increase. Rents also are expected to rise through the end of the 2020s to keep up with inflation. Seem like a mixed bag? Let’s sort it out. 

Mortgage Rates Stabilize 

According to Freddie Mac, the average 30-year fixed-rate mortgage has ranged from 6.08% to 7.44% over the past 52 weeks. NAR economists predict that mortgage rates should stabilize at the low end of that range for 2025 and 2026. 

What’s more, it is possible that this stabilization could even become a reduction later in the year: the Federal Reserve is anticipated to reduce interest rates an additional 4 times through 2025. 

Home Prices Rise 

Though mortgage rates are expected to plateau, home prices may not. 

Home prices will continue to increase steadily through 2026, in part due to the low supply of homes and in part as a response to inflation. With a 3-5% growth in new construction, housing starts will contribute to rising inventory in 2025.  

Increasing Home Prices 

2025: Median home price: $410,700; Up 2% over 2024 

2026: Median home price: $420,000, up 2% over 2025 

Existing home inventory will continue increasing in specific U.S. regions where demand is high, including Florida, Texas, Arizona, Colorado, and Utah. 

Home Sales Increase 

Despite the increase in prices this year, experts predict that home sales will still rise, due to the ever-increasing demand for housing.  

2025: Existing home sales to rise 9% year-over-year; New home sales to jump by 11% 

2026: Existing home sales to rise 13% year-over-year; new home sales to increase by 8% 

This is also in part due to what economists are calling the “Silver Tsunami”, a housing phenomenon triggered by the baby boomer generation aging out of their homes, opening up a higher supply of homes in the market. 

With these market predictions and stats in mind, there are a few trends that we’re noticing, and we think will pick up speed in 2025. 

4 Real Estate Trends You Can Expect in 2025  

With these market predictions in mind, here are some trends we’ve started to see in 2024 that are likely to pick up more steam in the year ahead. From first-time homebuyers heading back to cities to advanced tech like 3D printing and AI throwing their hats in the real estate game, 2025 is already shaping up to be an exciting year. 

#1: People Turn to Mortgage Assistance Programs 

The market is not what it was mid-pandemic — many aspects of the market are trending upward. Today, some homebuyers are buying in full, while others are beginning to turn away from high mortgages in favor of buyer-down payment assistance programs. Plus, some first-time homebuyers are able to buy with only 1% down. 

What’s more, we’re starting to see people not only buying homes for themselves — there is rising popularity for those buying investment properties. Multi-family properties are increasingly becoming a popular option as additional rental space can help offset costs of a sizable mortgage.  

#2: 3D-Printed Homes on the Rise 

While many aspects of the market continue to trend upward, home supply is still an issue, driving up demand and prices due to limited inventory. Enter: 3D printing. A few new players in construction have stepped into the light, offering factory built and 3D printed solutions to housing shortages.  

Since new construction will take up about 30% of the total home inventory in 2025, about twice as high as usual, some homebuyers are concerned about quality. This is a great opening for home inspectors seeking work in the new year. New construction, along with new construction methods, will be a great area to dive into and gain expertise to best serve their clients. 

#3: First-Time Buyers Are Getting Older 

The average age of the first-time homebuyer is increasing, the new average age of first-time homebuyer being 38 — the oldest it has ever been. The reason we’re seeing this change is likely due to factors like high home prices, mortgage rates, and higher amounts of debt held by younger people. 

There is also a rise in the amount of single people buying homes — in 2024, 24% of the buyer market was made up of single women (compared to just 11% that accounted for single men). 

So what does this all mean for real estate professionals in 2025? The new year is a great time to start focusing on making connections with new pools of clients.  

If you’re an agent, the Buyer Representation Essentials Package has the tools you need to hone your representation skills and ensure you’re staying informed on all the latest NAR changes to representation agreements. 

#4: Commercial Real Estate Getting Eyes From Investors 

Commercial real estate took one of the biggest hits in the market during the COVID pandemic. But now investors are shifting their interests, claiming this could be the best entry point in 15-20 years.  

Hybrid work is the new normal, with only about half of workers returning to the office for just a few days of the week, and commercial property sales have hit a low point in the interim. But now, thanks to highest-ever yields, values below where they were during COVID, investors are beginning to dive back in to commercial real estate – an early indication that this market could change very soon. 

For real estate professionals looking for a competitive edge, these positive signs of recovery mean that now is a great time to consider expanding into commercial real estate.  While this path is one you can pursue without a license, it’s always a good idea to explore special designations or certifications that help you stand out from the crowd. And for appraisers looking for that competitive advantage, this could mean working toward a higher license level.   

The Takeaway? 2025 Is an Exciting Year to Be in Real Estate  

No one has a crystal ball for real estate market predictions. This year may turn out to be a banner year of market recovery — or not. 

Fortunately, in such a wide-ranging and ever-evolving industry, there are a million and one ways to be successful. And with a real estate career, you are in the driver’s seat. We challenge you to find your path, live your purpose, use your skills, and make the income you deserve.  

And in the end, you’re sure to make your own success. 

The CE Shop is here to guide you through all the education you need to get there.