Real Estate Predictions for 2025

2025 Housing Market Predictions 

At Team Stephens Orren Shepherd, we don’t claim to have a crystal ball (ours shattered in March 2020), but we’ve got some solid insights on what to expect from the 2025 housing market. Here are five key trends we project for this year.

1. Interest Rates: Down, But Not in a Straight Line 📉

Good news for buyers: mortgage rates are expected to dip below 6.5% in 2025! But don’t expect a straight drop—think of it more like a zigzag journey. Temporary factors such as election-year uncertainty, increased Treasury debt issuance, and market volatility caused rates to spike nearly a full percentage point from mid-September to early November.

The bigger picture, however, remains steady: we’re in the cooldown phase of the economic cycle. Inflation is easing, the job market is softening, and the Federal Reserve is scaling back short-term rates. This combination sets the stage for gradually improving borrowing conditions as we move into 2025.

2. Existing Home Sales: A Comeback Story 📈

Cue the thaw! After bottoming out, existing home sales are set to jump by up to 10% year-over-year in 2025. The low inventory of 2022-2023 gave the market frostbite, but 2024 saw more sellers—and buyers—making moves. As everyone gets comfy with today’s “new normal” rates, expect the pace of sales to pick up.

3. Home Prices: Steady as She Goes 🏡

No dramatic drops here. Nationally, home prices will rise a modest 2%-4%. In Atlanta, expect steady growth in popular areas like Buckhead, Virginia-Highland, Brookhaven, and Sandy Springs.

4. Affordability: A (Slightly) Brighter Picture 💵

Good news: Affordability is on the rise. While prices won’t drop, falling interest rates and rising incomes are tipping the scales. The median U.S. household income went up over the past two years (👏), making homeownership more realistic for many.

5. Parental Bank of America: Open for Business 👨‍👩‍👧

Parents to the rescue! In 2025, more baby boomers will dip into their home equity piggy banks 🐷 to help adult children with down payments. With home prices still high, this trend will play a key role in getting first-time buyers into the market.

The New Normal: Less Drama, More Balance

After five years of roller coaster ups and downs 🎢, 2025 is bringing a calmer, more balanced housing market. Fewer records, fewer extremes, and more consistency. Whether you’re buying, selling, or just keeping an eye on the market, we are here to be your resource for all things Real Estate.

💌 Thinking about a change? Let Team Stephens Orren Shepherd guide you through Atlanta’s ever-evolving real estate landscape. Reach out today, and let’s make 2025 your best year yet!