Will Prices Drop? Will Rates Change? Here’s What to Expect for the Remainder of 2025

What’s Ahead for the Housing Market in 2025?

If you’ve been keeping an eye on the housing market this year, you’ve probably noticed some subtle shifts. So what’s next? Let’s take a look at what top industry experts are projecting for the rest of 2025—from home prices to mortgage rates—and how that could impact your plans.

Are Home Prices Going to Drop?

Buyers hoping for falling home prices may be encouraged by recent headlines hinting at declines in certain areas. But what’s really happening?

While the pace of home price appreciation has definitely eased, that doesn’t signal a housing crash. According to the National Association of Home Builders (NAHB):

“House price growth slowed . . . partly due to a decline in demand and an increase in supply. Persistent high mortgage rates and increased inventory combined to ease upward pressure on house prices. These factors signaled a cooling market, following rapid gains seen in previous years.”

In short, prices are still going up—just at a slower rate. On average, leading forecasts from eight different organizations show home values are expected to rise 1.5–2% this year.

That means waiting for a major price drop likely isn’t the winning strategy. Even in areas where prices have dipped slightly, the average decline is only around -3.5%—a far cry from the nearly 20% drop during the 2008 housing crisis.

And let’s not forget how far home prices have come. Data from the Federal Housing Finance Agency (FHFA) shows national home values have risen roughly 55% in just the past five years.

The bottom line? Home prices aren’t plummeting. While the growth has cooled off, the long-term trend still points upward. And depending on your market, conditions may vary, so connecting with a local expert is key to understanding what’s happening near you.

Will Mortgage Rates Go Down?

A lot of buyers are still on the sidelines, hoping rates will come down. But is that realistic in 2025?

Yahoo Finance recently reported:

“If you’re looking for a substantial interest rate drop in 2025, you’ll likely be left waiting. The latest news from the Federal Reserve and other key economic data point toward steady mortgage rates on par with what we see today.”

So what does that mean for you? Most industry projections suggest mortgage rates will hover in the 6% range for the rest of the year—likely settling in the mid-6s.

That’s not drastically different from where rates are now. So if you're waiting for a big drop before making a move, you might be putting your plans on hold for no reason.

It’s also worth noting that mortgage rates are influenced by broader economic trends—like inflation and Fed policy. Having a real estate professional who understands how these factors play into rate movement can help you make more informed decisions.

What This Means for Buyers and Sellers

No matter where you are in the process—buying, selling, or both—the current market requires a thoughtful, informed approach. Prices are still inching upward (though not as fast), and rates are expected to stay relatively steady. The big picture? We’re in a period of moderation, not volatility.

Final Thoughts

If you’re thinking about making a move, focus on your personal goals and situation—not just the market buzz. The best thing you can do is work with a trusted Rucker & Associates team member who understands the local landscape and can guide you through today’s evolving conditions.