People wanting to know what to expect from the 2025 housing market have no shortage of economic forecasts from companies in the real estate industry to thumb through.
Redfin economists Daryl Fairweather and Chen Zhao are the latest to weigh in. They project home prices to rise by 4% over the course of 2025, with existing home sales clocking in at a range between 4.1 million and 4.4 million.
This outlook is a bit more optimistic than the forecast from HousingWire. Conducted by HousingWire Lead Analyst Logan Mohtashami and Altos Research President Mike Simonsen, the forecast projects existing-home sales at 4.2 million and home-price growth at 3.5%.
But Redfin’s prospectus falls in the middle of expectations from forecasts analyzed by HousingWire. Forecasts on home sales range between 4.9 million — which is the projection from the National Association of Realtors — and Realtor.com’s 4 million.
Redfin’s expectation of mortgage rates just shy of 7% is at the higher end of the range established by other forecasts, but all of them agree that the election of Donald Trump could spell volatility for rates.
Trump has proposed steep tariffs on U.S. NAFTA partners and the so-called BRICS nations, which include China and a number of its allies. He has also threatened to use the military to conduct mass deportations of undocumented immigrants.
Both policies would affect the housing market. Economists believe that tariffs could reignite inflation and force the Federal Reserve to rethink its policy of cutting interest rates. Taken together, the tariffs and deportations could increase input costs for homebuilders, including for lumber and construction labor.
Redfin cites both of these proposals as having the potential to keep mortgage rates elevated, but adds that high rates might not stymie sales as much as expected.
“Even before the election, our data showed that rising mortgage rates didn’t deter buyers as much as expected, likely in part because many Americans have grown accustomed to high mortgage rates,” Redfin’s forecast reads. “If the economy stays strong and enough people can afford next year’s high housing costs, that would push up sales.”
Redfin also notes that any increase in homebuilding costs might be offset by reduced regulation around construction, adding that builder confidence surged in the days following the election in November.
Other predictions in the Redfin’s forecast include the possibility of consolidation in the real estate industry as a result of a different approach to mergers and acquisitions within the Federal Trade Commission.
The company believes the post-pandemic “flight to the suburbs” will continue to reverse, with urban dwellers return to major cities. The forecast also notes that members of Gen Z will give up on homeownership and remain renters well into their 30s.
The Mortgage Bankers Association, Fannie Mae, Realtor.com and Bright MLS have also published 2025 housing market forecasts.
