Realtor.com’s 2025 housing forecast: Low sales but rising prices

Home sales have been in the doldrums this year, and Realtor.com‘s 2025 forecast doesn’t see that getting much better next year. The real estate portal projects that existing home sales in 2025 will clock in at a hair above 4 million. While that’s 1.5% growth relative to 2024, it’s still below historical averages.

It’s also at the bottom end of what other economists from the real estate industry are forecasting for 2025, which is between 4 million and 4.9 million existing home sales. However, Realtor.com expects home-price growth of 3.7%, which is higher than most other forecasts. An average mortgage rate of 6.3% underpins their predictions.

There is good news in Realtor.com’s 2025 forecast: It expects housing inventory to grow by 11.7%, which would bring months of supply from 3.7 to 4.1. Economists consider months of supply between 4 and 6 to be a balanced market.

“While more inventory means buyers will likely have more time to make purchase decisions in 2025, in any market, a fast-acting buyer will have a higher likelihood of making the winning offer,” said Realtor.com Chief Economist Danielle Hale in a statement. “For this reason, it’s wise to get prepared financially and for the home search overall.”

The housing market in 2025 will be something of a wild card after the re-election of former President Donald Trump, who has proposed sweeping changes on the campaign trail that could upend many aspects of the economy.

He’s proposed tariffs of 25% on Mexico and Canada, and an additional 10% tariff on China. On Sunday, he threatened a 100% tariff on the so-called BRICS countries, which include Brazil, Russia, India, Iran and Egypt, among others. 

According to economists, the tariffs run the risk of driving inflation back up, which could prompt the Federal Reserve to pause interest rate cuts or even lead to rate hikes. Trump’s promise of mass deportations of undocumented immigrants also risks zapping the labor supply for homebuilders.

Taken together, these measures have the potential to exacerbate affordability challenges that have hampered the housing market, but Hale says it’s too soon to project what might happen in a Trump presidency.

“While President-elect Trump can work quickly with his administration to implement some regulatory changes, other policies that will affect housing, such as tax changes and broad deregulation, require the cooperation of other branches and levels of government,” Hale said in a statement. “The new administration’s policies have the potential to enhance or hamper the housing recovery, and the details will matter.”

HousingWire’s forecast, written by Lead Analyst Logan Mohtashami and Altos Research President Mike Simonsen, is a bit more optimistic than the Realtor.com forecast, projecting 4.2 million existing home sales in 2025. However, its expectation of 3.5% home-price growth is just below Realtor.com’s forecast. The Mortgage Bankers Association, Fannie Mae and the National Association of Realtors, among others, have each published 2025 housing market forecasts.