What’s Next for Home Prices and Interest Rates in 2025?

By Mark Callender

Hello, my name is Mark Callender and I am a licensed real estate agent with RE/MAX Results. Because I have been helping families buy and sell their homes for more than 18 years, I am now helping their children to buy their first homes and their parents to downsize. No matter the direction you’re moving, my goal is to make the process as calm and enjoyable as it can be.

What are experts predicting for the 2025 housing market? It’s a hot topic every year and this year is no different. They’re making predictions about interest rates and home prices. While we call them “experts,” their forecasts can be a hit or miss. This brings me to two of the most asked questions I’ve been getting lately:

1. Where are interest rates going? Many believe there’s going to be a slight drop in interest rates this year, settling around 6%, or even a little lower. If you’re thinking of getting a 15-year mortgage, you might see rates in the high fives, like 5.75%.

2. Where are home prices going? When it comes to home prices, the prediction is a modest increase of about 1% to 2% nationwide.

A lot of buyers and sellers are worried about a market crash, but there’s no need to worry because we don’t have the same inventory issues we faced back in 2008. There aren’t tons of properties just sitting on the market waiting for buyers. So, there’s no major recession in the housing market which means home prices aren’t likely to crash.

Does that mean now is a good time to buy a house? Ideally, now is a great time to purchase a home, but I want to stress that the decision to buy depends on whether you’re ready both financially and mentally.

If you feel ready to make that big purchase and it feels right, then go for it. If you’re not comfortable, even if you have the money, it’s probably not the right time for you. For most people, it’s likely the biggest purchase of your life, so it’s crucial to feel good about it.

Pro tip: Being in the market is often better than trying to time the market. If you can afford a home now, even with higher rates, then jump in. Refinancing is always an option if interest rates drop.

If you have any questions about the housing market or just want to chat about your options, feel free to reach out at (612) 961-9448 or Mark@MarkCallenderHomes.com. I’m here to help, whether you choose to work with me as your agent or not.