2025 REAL ESTATE MARKET: EXPERT PREDICTIONS
As we look ahead to 2025, understanding housing market projections can help you make informed decisions about your next real estate move. Whether you’re planning to buy or sell a home in Omaha or elsewhere, knowing what experts expect for mortgage rates, home sales, and prices can help you navigate the market with confidence.
Mortgage rates play a significant role in the housing market. The forecasts for 2025 from Fannie Mae, the Mortgage Bankers Association (MBA), the National Association of Realtors (NAR), and Wells Fargo show an expected gradual decline in mortgage rates over the course of the next year (see chart below):
Mortgage Rates Are Projected to Decrease Slightly
Mortgage rates are a significant factor in the housing market, affecting both buyers and sellers. According to projections from Fannie Mae, the Mortgage Bankers Association (MBA), the National Association of Realtors (NAR), and Wells Fargo, mortgage rates are expected to decline gradually throughout 2025.
The anticipated dip in mortgage rates is linked to the ongoing easing of inflation and a modest rise in unemployment. These factors suggest a strong but slowing economy, which could lead the Federal Reserve to reduce the Federal Funds Rate. Historically, when the Fed lowers its rates, mortgage rates tend to follow suit. As Morgan Stanley points out:
“With the U.S. Federal Reserve widely expected to begin cutting its benchmark interest rate in 2024, mortgage rates could drop as well—at least slightly.”
More Homes Are Expected to Sell in 2025
An increase in both home supply and buyer demand is expected as mortgage rates decline and more people, who were hesitant due to higher rates, choose to enter the market. This is one of the main reasons experts are forecasting an uptick in home sales for 2025.
Fannie Mae, MBA, and NAR predict that around 5.4 million homes will be sold in 2025, a modest increase compared to the 4.8 million homes sold in 2023 and the expected 4.5 million homes for 2024.
While slightly lower mortgage rates won’t cause a flood of activity, they will prompt more homeowners to list their properties and encourage more buyers to act, which could lead to increased competition in the market.
Home Prices Will Rise Moderately
As more buyers step into the market, experts expect continued upward pressure on home prices. On average, forecasts from 10 of the most trusted real estate sources predict national home prices will rise by about 2.6% in 2025.
Though the exact rate of growth may vary by location, the consensus is that home prices will continue to increase at a slower, more sustainable pace compared to previous years. It’s important to note that while this is a national average, local markets—such as Omaha—may experience different price trends depending on factors like housing inventory and demand.
Bottom Line
The 2025 housing market is shaping up to be a year of gradual improvement, with slightly lower mortgage rates, increased home sales, and moderate price growth. If you’re considering buying or selling a home in Omaha, NE, staying informed about these trends can help you make the best decision. Let’s connect to discuss how these forecasts may impact your real estate goals in the year ahead.
