Where the 2025 Housing Market Is Headed (And What It Means for You)
While no forecast is guaranteed, economists from Fannie Mae, Zillow, NAR, MBA, and others have released updated projections on everything from home prices and mortgage rates to sales activity and market recovery.
Can you believe we’re already at the of 2025?
As we head into last quarter of the year, a lot of buyers and sellers are asking the same thing: What’s next for the housing market?
While no forecast is guaranteed, economists from Fannie Mae, Zillow, NAR, MBA, and others have released updated projections on everything from home prices and mortgage rates to sales activity and market recovery.
In this post, I’ve rounded up the key takeaways from their mid-year outlooks—and added a breakdown of what they could mean for our local market here in Houston.
Home Price Forecasts
Most housing economists agree: prices will rise, but not by much. And depending on where you live, they could even decline.
Home price forecasts for 2025:
- Cotality: +4.3% from April 2025 to April 2026
- Fannie Mae: +4.1% in 2025
- Home Price Expectations Survey (HPES): +3.3%
- NAR: +3% in 2025, +4% in 2026
- MBA: +1.3% in 2025, <1% in 2026
- Zillow: -1.4%, an improvement from its earlier prediction of -1.9%
Notably, some overheated markets like Florida, Texas, Hawaii, and Washington D.C. are seeing declines.
Meanwhile, more affordable areas in the Midwest and Northeast are holding strong, especially suburbs near expensive cities.
❗Redfin reports a 7.6% year-over-year increase in median sale prices in Houston (to about $355,000) ❗
❗Best neighborhoods for appreciation:
According to Houston Properties, some top performers include Highland Village, Memorial Park, Briar Hollow, River Oaks Shopping Area, Garden Oaks, EaDo, Upper Kirby, Oak Forest, Braeswood Place❗
Existing Home Sales Outlook
Sales activity is expected to grow this year, but recovery will be gradual.
Forecasts for existing home sales in 2025:
- NAR: +6% (with an 11% gain expected in 2026)
- Fannie Mae: +4.4% (4.24 million home sales)
- MBA: 4.3 million home sales
- Zillow: +1.4% (4.12 million home sales)
Improving inventory and gradual rate relief are creating more movement in many markets.
❗ Price bands & housing types:
- Townhomes in the $100K–$250K range are viewed as solid performers over the longer term. Houston Properties
- Newer or renovated homes in “mid-tier” zones (not ultra luxury, not ultra cheap) tend to attract the most activity.
- In April 2025, under $99,999 homes saw a significant sales bump (+14.9%) vs year before; $150,000–$249,999 also rose modestly (+3%) HAR.com
Mortgage Rate Predictions
If you’re waiting for mortgage rates to drop below 5%, you’ll likely be waiting a while. But slow, steady improvement is expected
2025 mortgage rate forecasts:
- MBA: 6.6% average in Q4 2025; down to 6.3% by end of 2026
- NAR: 6.4% in late 2025; 6.1% in 2026
- Fannie Mae: 6.1% by year-end; 5.8% in 2026
Lawrence Yun, NAR’s Chief Economist, calls mortgage rates the “magic bullet” for unlocking market momentum. Lower rates could encourage more buyers, especially first-timers, back into the market.
❗“Despite rising inventory, Houston’s home prices have held mostly steady, with no dramatic drop — signaling resilience in our market.”
What This Means for You
Here’s the bottom line for buyers, sellers, and homeowners in today’s market.
Recovery is happening, but slowly. Most forecasts point to modest gains in both home prices and sales volume through the rest of 2025, with more growth expected in 2026.
Mortgage rates are likely to stay above 6%, which means realistic budgeting will remain essential for anyone looking to purchase.
But it’s important to remember that national trends only tell part of the story. Every local market behaves differently, and what’s happening in one region may not apply in another. Even different price points within the same market can experience completely different dynamics!
If you’re curious about how these trends are playing out in EADO, Heights, let’s talk. I’m happy to break down what’s happening and how it could impact your plans to buy or sell.
Here’s What Experts Predict
Homes Central Real Estate, Inc
2016 Main St #109
Houston, TX 77002
832-701-4181
Homes@marcelaamador.com
@MarcelaAmadorRealtor
