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What will the U.S. housing market look like in 2025? Will home prices keep rising or start to decline?
As we look ahead, key factors like interest rates and housing supply will play a major role in shaping the market. Let’s take a closer look at what experts have to say about it.
This article gives you valuable insights, but remember, it’s not and will never be investment advice. We pull data from a range of sources to provide you with the most accurate picture possible, yet we can’t guarantee complete accuracy. Markets are difficult to predict. Make sure to do your own research and consult a professional before making any financial moves. Any risks or losses are your own responsibility.
1) Zillow predicts 4.4 million home sales in 2025, fueled by lower rates and more inventory
Zillow forecasts that the housing market will pick up slightly in 2025, with an estimated 4.4 million existing home sales.
This marks a gradual improvement compared to the 4.1 million transactions seen in 2023 and anticipated for 2024.
One key reason for this expected growth is the potential for lower mortgage rates in 2025. When rates are lower, it becomes easier for buyers to finance their purchases, which could encourage more people to enter the market.
Additionally, more inventory is likely to enter the market as rates drop. With homeowners feeling more confident about selling and buyers better able to afford homes, overall sales activity is expected to rise.
Source: Zillow
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2) Fannie Mae predicts that total home sales will increase to about 5.24 million in 2025
Fannie Mae's forecast anticipates a rise in total home sales to approximately 5.24 million in 2025, up from 4.77 million in 2024.
This projection reflects a gradual recovery in the housing market, influenced by several key factors.
One significant element is the expected decline in mortgage rates. As we will see later, Fannie Mae predicts that the average 30-year fixed mortgage rate will decrease to around 5.9% by the end of 2025, down from higher levels in previous years. Lower mortgage rates can make home financing more affordable, potentially encouraging more buyers to enter the market.
Additionally, the housing supply is projected to improve. The "lock-in effect," where homeowners hesitate to sell due to their existing low mortgage rates, is expected to diminish. This change could lead to more homes being listed for sale, providing buyers with more options and stimulating market activity.
Economic conditions also play a role in these projections. A stable economy with steady job growth and controlled inflation can boost consumer confidence, encouraging home purchases. Fannie Mae's forecast suggests that these favorable economic factors will support the anticipated increase in home sales.
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3) For Statista, U.S. existing home sales are expected to reach 5.6 million units in 2025
According to Statista, U.S. existing home sales are projected to reach 5.6 million units in 2025, marking a recovery from recent declines.
Sales had peaked at 6.12 million units in 2021 but dropped to 4 million in 2023 due to rising costs and economic uncertainty.
The decline was driven by surging home prices and higher mortgage rates, which made homeownership less affordable. Economic instability also caused buyer hesitation, further slowing the market.
The recovery is expected as prices stabilize, rates ease, and the economy strengthens, boosting buyer confidence.
With 5.6 million sales forecasted, the housing market shows signs of regaining momentum.
Source: Statista
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4) HousingWire projects a 5% increase in home sales for 2025
HousingWire projects a 5% increase in home sales for 2025, estimating around 4.2 million transactions. This suggests a gradual recovery after a slow housing market period.
The outlook reflects several factors. Mortgage rates are expected to ease slightly, ranging between 5.75% and 7.25%, making financing more accessible and potentially drawing in more buyers.
As we will discuss later, housing inventory is anticipated to grow by 13%, peaking at 800,000 unsold homes in October and ending 2025 at 720,000 homes. More options for buyers could boost activity.
Economic stability underpins this forecast, with moderate growth and a low risk of recession in 2025. Stable conditions enhance consumer confidence, driving spending, including housing.
Source: HousingWire
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5) CoreLogic's Chief Economist, Selma Hepp, expects a 9% rise in 2025 home sales
Selma Hepp, the chief economist at CoreLogic, shares an optimistic outlook for the real estate market in 2025.
According to her, total home sales are expected to grow by 9% compared to 2024. She highlights two key factors driving this growth: lower mortgage rates and a greater supply of homes for sale.
These changes will give homebuyers more options and make homes more affordable by easing competition, reducing bidding wars, and slowing home-price increases.
As mortgage rates decrease, more homeowners who are currently locked into low-rate loans may feel ready to sell their homes and move into new ones.
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6) The National Association of Realtors projects a 9% rise in home sales in 2025 and 13% in 2026
Lawrence Yun, Chief Economist for the National Association of Realtors (NAR), predicts a 9% rise in 2025 and a 13% increase in 2026, driven by positive trends.
As we will discuss later in this article, he anticipates 6% mortgage rates, offering buyers predictable financing.
Improved housing inventory will provide more options and potentially slow price increases, while job growth boosts buyers’ purchasing power.
Yun emphasizes wealth-building benefits of homeownership, noting homeowners’ median net worth far exceeds renters’. Starting earlier helps individuals accumulate wealth sooner.
Sources: NAR, Real Estate News, Colorado Biz, Forbes
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So, how many homes will be sold in the U.S. in 2025? Around 5 million
When it comes to predicting the number of home sales in the U.S. for 2025, experts have a range of opinions, but they generally agree on a positive trend.
For instance, Zillow forecasts 4.4 million home sales, while Fannie Mae is a bit more optimistic with 5.24 million. Statista is even more bullish, predicting 5.6 million sales. On the other hand, HousingWire is more conservative, estimating around 4.2 million transactions.
CoreLogic and the National Association of Realtors (NAR) both expect a 9% rise in home sales, which aligns with the general consensus of a market recovery. The key factors driving these predictions include lower mortgage rates and an increase in housing inventory, making homes more affordable and accessible.