Will Home Prices Drop?

Many hopeful buyers are waiting for home prices to fall—and with some recent headlines reporting slight declines in certain markets, it’s easy to think a bigger drop is just around the corner. But let’s look at the facts.

While price growth is indeed slowing, that doesn’t signal a crash. According to the National Association of Home Builders (NAHB):

“House price growth slowed . . . partly due to a decline in demand and an increase in supply. Persistent high mortgage rates and increased inventory combined to ease upward pressure on house prices. These factors signaled a cooling market, following rapid gains seen in previous years.”

In other words, the market is stabilizing—not collapsing. And despite the slower pace, national home prices are still expected to rise in 2025. The average forecast from eight major industry experts projects a modest increase of 1.5% to 2% this year (see graph below).

That means, if you’re holding out for a major price drop, experts say that’s just not likely.

Yes, some local markets are seeing slight price declines—but on average, those dips are around -3.5%. That’s a far cry from the nearly 20% drop we saw during the 2008 housing crash.

And when you put those small declines into perspective, they’re minimal compared to the long-term gains. According to the Federal Housing Finance Agency (FHFA), home prices have risen 55% nationally over the past five years.

The bottom line? Prices aren’t crashing. They’re just growing at a more moderate pace. While some markets might see flat or slightly fluctuating prices by the end of the year, others will continue climbing. That’s why it’s key to stay informed about what’s happening in your local market—and working with a real estate pro can help you do just that.

Will Mortgage Rates Drop?

Many buyers are also thinking: Maybe I should wait for mortgage rates to come down. But is that the best move?

According to Yahoo Finance:

“If you’re looking for a substantial interest rate drop in 2025, you’ll likely be left waiting. The latest news from the Federal Reserve and other key economic data point toward steady mortgage rates on par with what we see today.”

In short, trying to “time the market” could backfire. Most forecasts suggest mortgage rates will stay in the 6% range, with many experts predicting they’ll settle in the mid-6s by the end of 2025 (see chart below).

And since that’s not a big shift from where rates stand today, waiting may not be the best move—especially if you need to make a change now. The truth is, while rates may not be as low as you’d like, putting your goals on hold for something that’s unlikely to happen could cost you in the long run.

That’s why working with a trusted expert is more important than ever. A knowledgeable agent will monitor economic indicators—like inflation and market trends—that influence mortgage rates, so you can make informed decisions as conditions evolve.

The Takeaway for Buyers and Sellers

Whether you’re looking to buy, sell, or do both, today’s market calls for a clear strategy—not guesswork. Home prices are still rising overall (just at a slower pace), and mortgage rates are projected to remain steady. So rather than a market crash, we’re seeing a market shift toward balance.

Bottom Line

If you’re thinking about making a move, the smartest approach is to focus on your own needs and timing, not just the headlines. And that starts with having a real estate professional by your side—someone who understands the local market and can help you navigate every step with confidence.

Let’s connect and create a plan that’s tailored to your situation.