What Do Experts Predict for the Housing Market in 2025?

By Shawn Hermosillo

Shawn Hermosillo, founder of Hermosillo Real Estate Group (HRE), is a Sonoma County native with deep roots in the community and a passion for real estate.

Do you need more certainty about the real estate market in 2025? With the dramatic shifts we’ve seen this year—higher interest rates, a slowing market, and fluctuating sales prices—it’s natural to wonder what’s next.

Here are the trends and expert predictions to help you prepare for next year:

On mortgage rates. Fannie Mae and Freddie Mac say interest rates could plummet below 6%. However, they’ve been stubbornly above 6% lately. If rates do come down, we could see a revitalized market. But if they don’t, further stagnation in sales prices and buyer demand may occur.

On home prices. If experts are correct and interest rates decrease, prices should stay steady or even increase. However, if rates remain high, the price of homes might fall. Whether you’re a buyer or seller, paying attention to market trends is crucial.

On buyer behavior. If interest rates drop, more buyers will likely enter the market because higher affordability will open doors that high rates have closed. In recent months, we’ve seen fewer sales, more price reductions, and longer days on the market. If rates fall, expect increased buyer activity. If they stay flat or rise, buyer activity could reduce even more, potentially leading to more homes on the market.

In some ways, increased inventory is good for buyers. As inventory increases, prices usually fall, creating great buying opportunities for those ready to move. Some sellers need to sell their homes urgently—perhaps they’re relocating to Idaho and can’t keep their current home. Buyers are looking for sellers willing to negotiate, creating exciting opportunities in this market.

So, what does all this mean for you in 2025? If you’re a seller, pay close attention to recent sales prices; data from four, five, or six months ago is outdated. If you’re a buyer, be cautious, stick to your budget, and be patient. There are plenty of opportunities in this market—it’s about finding the right time and the right house.

The real estate industry is evolving, just as it did in 2024. Grasping these changes helps you make the best buying or selling choices. If you have questions or need guidance handling the housing market, contact me at (707) 591-0570 or hermosillogroup@gmail.com. Let’s work together to find the best opportunities for you at any time of the day.