What to Expect From the 2025 Housing Market

As we look ahead to 2025 here in Central Massachusetts, it’s crucial to understand what the experts predict for the local housing market. Whether you’re considering buying or selling a home next year, having a clear sense of what’s expected can help you make the best decision for your homeownership goals.

Here’s an early glimpse at the latest projections on mortgage rates, home sales, and property values in our area for 2025.

Mortgage Rates Are Projected To Come Down Slightly

Mortgage rates are a big factor in the housing market here in Central Massachusetts. According to forecasts for 2025 from Fannie Mae, the Mortgage Bankers Association (MBA), the National Association of Realtors (NAR), and Wells Fargo, we can expect a gradual decline in mortgage rates throughout the coming year (see chart below):

Mortgage rates are projected to come down here in Central Massachusetts due to easing inflation and a slight rise in unemployment, both indicators of a strong but slowing economy. Many experts believe these signs will prompt the Federal Reserve to lower the Federal Funds Rate, which typically leads to lower mortgage rates. As Morgan Stanley puts it:

“With the U.S. Federal Reserve widely expected to begin cutting its benchmark interest rate in 2024, mortgage rates could drop as well—at least slightly.”

More buyers ready to jump into the market will put continued upward pressure on prices. Take a look at the latest price forecasts from 10 of the most trusted sources in real estate (see graph below):

On average, experts predict home prices will increase by about 2.6% nationally next year. However, opinions vary on the exact rate of growth. While experts agree that prices will rise moderately at a more typical pace, it’s important to remember that home prices will differ depending on the local market.

Understanding 2025 housing market forecasts can help you plan your next move. Whether buying or selling, staying informed about these trends will ensure you make the best decision possible. Let’s connect to discuss how these forecasts could impact your plans.