Zillow’s 2025 Housing Forecast Just Dropped

Table of Contents

• 📈 Home Prices Are Still Going Up Just Not as Fast

• 💸 Mortgage Rates: Easing (A Little)

• 🏘️ Still Not Enough Homes on the Market

• 📍 Local Markets Will Do Their Own Thing

• A Final Thought

📈 Home Prices Are Still Going Up Just Not as Fast

After a few wild years of skyrocketing prices and then a bit of a cooldown, Zillow expects home prices to go up about 2.6% in 2025.

What does that mean? Basically, the market is stabilizing. We’re not seeing dramatic price drops, but we’re also not in the overheated market of 2021 anymore. Think of it like a return to a more normal real estate rhythm.

💸 Mortgage Rates: Easing (A Little)

Mortgage rates have been a major barrier for buyers over the past year, hanging out around 7%. Zillow believes they’ll ease a bit in 2025 possibly closer to 6.5% by year’s end. It’s not a huge drop, but every little bit helps, especially when you’re trying to stretch your budget.

If you’re waiting for rates to drop below 5% again… don’t hold your breath. But if you’re a buyer who stepped back last year, 2025 could bring some fresh opportunity.

🏘️ Still Not Enough Homes on the Market

One of the biggest challenges nationwide is inventory there just aren’t enough homes to meet demand, especially affordable ones. That’s not changing overnight, but we are starting to see more sellers dip their toes back in and more new homes being built.

Builders are focusing on smaller, budget-friendly homes and multifamily units, which could help buyers and renters alike in the long run.

📍 Local Markets Will Do Their Own Thing

Even though we’re talking about national trends here, it’s important to remember that real estate is local. Some areas especially affordable cities with growing populations could see bigger price gains. Other places, like parts of the West Coast or Northeast, may stay flat or even dip slightly.

A Final Thought

2025 isn’t going to be a wild ride. And honestly? That’s a good thing. A calmer, more balanced market gives everyone—buyers, sellers, and investors—a better shot at making smart decisions.

Thanks for reading! I’ll keep you posted on any major updates as the year goes on!