Joe’s 2025 Real Estate Report

Experts Predict Home Values to Increase 1.5% to 3.6% in 2025.

Top housing experts and economists give a glimpse of what mortgage rates, home values and the national real estate market will do in 2025.

Key Takeaways

• Mortgages are forecasted to remain higher for longer; but there are things you can do to lower your rate.
• Home values are predicted to increase incrementally on a national level; and there are projects you can do to increase your home’s value.
• The national market will slightly favor sellers in negotiations; however, real estate is driven by local dynamics and may favor either buyers or sellers.

Note: real estate is a dynamic market and forecasts made in this article will change as the year unfolds.

Mortgage Rates Will Average 6.4% in 2025

In 2023, the average 30-year mortgage peaked at 7.79% following the pandemic. Rates came down from that peak in 2024. What will mortgage rates do in the next year?

The Federal Reserve is predicted to lower the federal funds rate 6 to 8 times in 2025; but mortgage rates are not set by the Federal Reserve and may not drop significantly (National Association of REALTORS®).

Fannie Mae predicts mortgage rates to average 6.4% in 2025. Mortgage Bankers Association also predicts mortgage rates to average 6.4%, but with slightly higher rates compared to Fannie’s forecast.