Are you curious about where the housing market is headed in 2025? The outlook is shaping up to be optimistic, with experts forecasting changes in two key areas that could affect your decision-making: mortgage rates and home prices.
Whether you’re planning to buy or sell, here’s what industry experts are saying about these upcoming trends and how they could impact your goals.
Mortgage Rates Forecasted to Decline Gradually
Mortgage rates have been a major influence on housing market activity over the past few years. If you’ve felt uncertain about rates, here’s some good news: experts are predicting a gradual decrease throughout 2025. The path to lower rates won’t necessarily be smooth, as economic data and inflation numbers will play a role in any fluctuations, but the broader trend should be a gradual easing.
This expected decline will bring more buyers and sellers into the market as affordability improves. Lower mortgage rates mean a more manageable monthly mortgage payment, giving you greater flexibility in your home search. As Charlie Dougherty, Director and Senior Economist at Wells Fargo, explains:
“Lower financing costs will likely boost demand by pulling affordability-crunched buyers off the sidelines.”
However, this increase in affordability is likely to bring more competition among buyers. With potentially more buyers entering the market, now might be a strategic time to start your search and beat the rush. A local real estate agent can help you navigate these shifts to ensure you’re well-prepared as demand rises.
Home Prices Expected to Rise at a Steady, Moderate Pace
While mortgage rates are expected to ease, experts are forecasting home prices to grow at a more moderate rate than recent years. Industry projections suggest a national price growth average of around 2.5% in 2025, which is much more manageable than the double-digit increases seen previously.
So, why are prices still climbing? The answer lies in market dynamics. With more buyers re-entering as rates decrease, demand is expected to rise. However, as sellers also feel more confident listing their homes in a lower-rate environment, the increase in available inventory should keep price growth in check. This balanced market could be a win-win for both buyers and sellers, offering stability.
In some markets, price growth may vary from the national average, with certain areas seeing either slightly faster or slower increases. As Lance Lambert, Co-Founder of ResiClub, notes:
“Even if the average national home price forecast for 2025 is correct, it’s possible that some regional housing markets could see mild home price declines, while some markets could still see elevated appreciation. That has been, after all, the case this year.”
Working with an experienced local agent can provide you with the most accurate insight into what’s happening in the Brookings market specifically, so you know how national trends may affect your next move locally.
What It All Means for Buyers and Sellers
This market shift in 2025 means both buyers and sellers are positioned to benefit. Here’s a closer look at what this could mean for you:
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If You’re Buying: Lower mortgage rates will ease monthly payments and help stretch your buying power. However, as demand rises, competition may, too. Acting sooner rather than later could help you secure the best rate and avoid bidding wars as more buyers rejoin the market.
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If You’re Selling: With modest price growth anticipated, you may find more motivated buyers without facing the aggressive price bidding that defined the last few years. If you’re planning to buy and sell in 2025, your buying power is likely to improve due to easing rates.
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Navigating a Changing Market: As mortgage rates and home prices shift, working with a knowledgeable real estate agent can be your biggest asset. A local expert can help you make informed decisions that align with these market changes.
Bottom Line
With a promising forecast for mortgage rates and stable, steady home price growth, 2025 could offer some great opportunities for both buyers and sellers in Brookings and the surrounding areas. Whether you’re thinking of purchasing your first home, upgrading, or downsizing, now is the time to start planning with a trusted real estate advisor. Connect with Shane Andersen of the Brookings Home Team today to ensure you’re ready to make the most of what’s coming in 2025.
Posted by Shane Andersen on
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