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- Mortgage rates have increased in recent months, and home prices remain elevated.
- In 2025, affordability may improve somewhat as rates inch down. But prices will likely continue to rise.
- Hopeful buyers should start preparing as early as possible by saving money and improving their credit.
Thanks to climbing home prices and high mortgage rates, it’s been a tough few years for the housing market, leaving many hopeful homebuyers eager to get off the sidelines and into a home.
Housing market conditions may ease somewhat in 2025 now that the Federal Reserve has started cutting rates. But it’s likely still going to be expensive to get a mortgage and purchase a home.
If you’re planning to buy or sell soon, here’s what you need to know about housing market predictions in 2025, and how you can prepare.
Overview of the housing market
The average home value in the U.S. is $357,469, according to Zillow — up 2.5% year over year. In December, 30-year mortgage rates averaged 6.42%, and they’ve been trending even higher in recent weeks.
For the past couple of years, mortgage rates have been elevated while home prices have continued to climb, creating an affordability problem…