4 Housing Market Predictions For 2025, According to Experts
Written by
Cynthia Measom
Edited by
Angela Corry
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The housing market is shaping up for some interesting changes. Although no one has a crystal ball, experts are sharing predictions about what could happen.
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Here are the key factors that will influence the housing market in 2025, according to experts.
Home Prices
Kori Sassower, founder and principal agent at The Kori Sassower Team, said that in suburban areas, low inventory levels will keep prices high due to the combination of low supply and high demand. She also explained that in the cities, a slight rebound in prices is expected because tight inventory will encourage people to remain in urban areas longer.
“Additionally, strong bonuses and a profitable year on Wall Street will attract more buyers in the luxury market, leading to an increase in pied-à-terre sales in the cities,” she continued. “However, areas significantly impacted by climate change, which have seen rising insurance premiums, are likely to experience a decrease in prices as buyers are deterred from making those risky investments.”
Home Inventory
Sassower predicted that 2025 is going to have even less inventory than 2024.
“The competition will be fierce with multiple offer situations in coveted suburbs across the country,” she said. “People are living in their homes longer and there is not enough supply for first-time home buyers. If interest rates go below 5.5% (which we do not expect) this could open up some opportunities, but I do not expect that to happen in 2025.”
Buyer Trends
“Buyers have become more flexible in their home search,” said Sassower. “Previously, they were focused on specific towns. But with low inventory, they have broadened their areas of interest. Many buyers who once wanted move-in-ready homes are now open to making improvements if they find a property in a desirable location.”
Home Trends
Sassower said that regarding home trends, pools have become less important compared to their significance during the pandemic. She also added that buyers are showing a preference for more formal spaces and are also looking for open-concept designs with some limitations.
“For example, they often want kitchens that open to the family room while still maintaining separate formal living and dining areas,” she explained. “Additionally, home offices have continued to be a must-have feature.”
Advice To Buyers and Sellers in 2025
Tammy Jerome, award-winning real estate broker with Coldwell Banker and host of “The American Dream” TV show, advised sellers to price their homes reasonably due to it being a buyers’ market right now.
“Don’t fall into the thinking, ‘I can always lower the price’ because by the time you do, the listing becomes stale …” she said. “If you price correctly, you’re likely to get multiple offers — even in this transitional market.”
For buyers, Jerome recommended buying. “Every month that you pay rent is a waste,” she said. “Own and grow your equity. Before you know it, you’ll have a substantial amount of equity in your own home, rather than pay[ing] someone else’s mortgage when you rent.”
Sassower said that buyers should start preparing now.
“Get your team in place now: real estate agent, attorney, lender and home inspector,” she recommended. “Be educated on the marketplace and the areas of interest, and know what you can afford and what contingencies you can waive. The market will move very quickly, so make sure your team is ready to move quickly as well. Off-markets continue to be popular, so working with a hyper-local agent that has the pulse on the marketplace is essential.”
For sellers, Sassower has this advice: “Meet with your agent now so you know what needs to happen to prep your home for sale,” she recommended. “A few slight improvements to a home can mean much higher profit margins. Painting, lighting, light staging [and] cleaning up the landscaping all make huge impacts on how the buyers view the home.
“Price your home right. Overpriced homes in any market sit and lose value. The first weekend on the market is the most important. Bidding wars are what will get you the very high price [you] are looking for and the best way for a bidding war is to have your home positioned well for the most buyers to come see it. That means the right price with the look of a refreshed home.”
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