Real Estate Market: Discover what is expected for 2025

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The year 2024 has been a noteworthy one for the national housing market. Although mortgage rates have dipped since 2023, high home prices and continued low inventory have kept many potential buyers on the sidelines. As we move further into the new year, it’s a fitting time to assess the current landscape and consider what the future might hold for home buyers and sellers.

National Real Estate Market trends and stats

Here’s what we know about the national real estate market at the time of this writing. This, based on the latest data from the National Association of Realtors, Redfin, and The Mortgage Reports:

$404,400 – median existing-home sales price (up 6.0% year-over-year)
4.24 million – seasonally adjusted annual rate of existing home sales (up 9.3% year-over-year)
1.15 million (3.3 months’ supply) – inventory of unsold existing homes (up 16.2% year-over-year)
35 days – average number of days existing homes remained on the market in December (6 days higher than a year ago)
31% – percentage of home sales coming from first-time buyers (up from 29% a year ago)
7.049% – Today’s average conventional 30-year fixed mortgage rate

Numbers alone don’t paint the full picture. To better understand how we arrived at this point, evaluate the current state of the national real estate market, and explore forecasts for key factors like rates, prices, inventory, and leverage, we turned to a range of industry experts. Below, we share their insights and predictions.

Instead, this chart highlights projected rent growth percentages, median prices, property types, and regions, offering insights into rental market trends.

Current Real Estate Market overview

These professionals were asked to give a broad perspective on where the housing landscape is currently and perhaps where it will be in 2025. Here’s what they had to say.

Rick Sharga, president/CEO of CJ Patrick Company: “The real estate market isn’t particularly pretty right now. We’re likely to end the year with fewer existing home sales for the third consecutive year, falling from 6 million in 2021 to 5 million in 2022, 4 million in 2023, and somewhere around 3.8 million this year, which would be the lowest number of homes sold since 1995. Affordability is the worst it has been in the last 40 years. And the inventory of homes for sale is still off by more than 20% from pre-pandemic levels. So there’s not much to buy, and what’s available isn’t very affordable.”

Kenon Chen, executive vice president, strategy and growth, Clear Capital: “The current national housing market continues to slowly improve, but is marked by now familiar challenges of limited supply and home price increases. The amount of housing supply has steadily improved since January, and has finally reached the levels we saw in 2020. However, we remain well below pre-pandemic inventory numbers which contributes to home price appreciation remaining at 4.7% year-over-year. Expecting that purchase demand will continue to grow, and that mortgage rates will gradually decline over the next year, we can expect home prices to continue to increase without a substantial change in supply.”

The following data may also help you. Track housing construction volumes and total production to identify changes in housing supply.

Will 2025 be a buyer’s or a seller’s market?

The perspectives from market experts suggest a shifting landscape in 2025. While the housing deficit continues to drive competitive conditions, there is optimism about a gradual transition from a seller’s market to a more balanced one.

If you’re dreaming of owning a home in 2025, you’re in luck! The National Association of Realtors (NAR) has just released its list of 10 housing market hotspots poised to outshine the rest of the country in sales next year. These aren’t just random locations; they’ve been carefully selected based on strong economic, demographic, and housing factors that signal future market strength. So, if you’re looking to buy, these are the places to watch! The key is to know where to look.

When will home prices drop?

Experts predict that home prices in 2025 will likely remain stable or see modest increases, particularly influenced by slow wage growth, elevated mortgage rates, and varying conditions across local markets.

What Makes These Real Estate Markets Hot?

The NAR didn’t just pick these 10 cities out of a hat. They looked at a variety of factors, including:

Affordable Home Prices: Areas with a good mix of starter homes and generally lower prices are always attractive.
Stable or Declining Mortgage Rates: As rates potentially settle around 6% next year, buyers will get a bit of breathing room.
Strong Job Growth: A thriving local economy means more people can afford to buy and are also looking to settle down in the area.
Net Migration: If an area is attracting new residents, the housing market tends to stay active.
Fewer “Locked-In” Homeowners: This refers to people with older, lower-rate mortgages who are unlikely to sell. Fewer locked-in homeowners mean more homes for sale (more inventory).

NAR’s Chief Economist, Lawrence Yun, put it well: “Important factors common among the top-performing markets in 2025 include available inventory at affordable price points, a better chance of unlocking low mortgage rates, higher income growth for young adults and net migration into specific metro areas.” He also believes that the “worst of the affordability challenges are over” as more inventory, stable mortgage rates and continued job and income growth pave the way for more Americans to achieve homeownership.

Top Housing Markets for Buyers in 2025: NAR’s Expert Forecast

Here are NAR’s 10 top housing hot spots for 2025 in alphabetical order. I’ll share some insights based on my understanding of these areas, along with the data provided by NAR.

1. Boston-Cambridge-Newton, Massachusetts-New Hampshire

Average Home Price: $694,494
Why it’s Hot: While Boston is pricey, there are a few key things that make it a hotspot for the coming year. NAR expects mortgage rates here to stabilize, which will likely reduce the number of locked-in homeowners, leading to more inventory. The area also features a good number of starter homes and mortgage rates that tend to be lower than the national average.
My Thoughts: Boston is a great city with a vibrant economy. Although the prices are above the national average, the potential for job growth and the presence of starter homes makes it an interesting place for buyers. If you are considering buying here, make sure you have your finances in order.

2. Charlotte-Concord-Gastonia, North Carolina-South Carolina

Average Home Price: Data not available, but 43% of homes are priced below $324,000
Why it’s Hot: Charlotte has seen 10% job growth in the past five years and a large share of affordable homes, with 43% priced below $324,000. The interest rate in the area is 6.85%, which is a little below the national average.
My Thoughts: Charlotte’s a rapidly growing city. Its combination of job growth and affordable housing makes it a very attractive option, particularly for families and young professionals. This is a market I would keep a close eye on!

3. Grand Rapids-Kentwood, Michigan

Average Home Price: $271,960
Why it’s Hot: Grand Rapids offers affordable home prices, averaging around $271,960. While the mortgage rates are slightly higher than the national average, the area has fewer homeowners locked into lower mortgage rates, so more homes are likely to come on the market.
My Thoughts: Grand Rapids has a lot going for it: lower cost of living, nice communities, and an opportunity to enter the housing market. If you’re priced out of larger markets, it’s definitely worth considering.

4. Greenville-Anderson, South Carolina

Average Home Price: $307,315
Why it’s Hot: Greenville boasts affordable average home prices at $307,315, coupled with homes selling quickly – about 17 days on the market. 42% of homes are starter homes, and despite slightly higher mortgage rates, the market continues to attract new residents.
My Thoughts: Greenville’s a good option for young families and professionals. The relatively affordable prices, and strong demand signal an opportunity for home buyers. Keep an eye on mortgage rate trends here, though.

5. Hartford-East Hartford-Middletown, Connecticut

Average Home Price: $178,696
Why it’s Hot: The average home price is hard to beat at $178,696. The city had one of the lowest mortgage rates in 2023, at 6.5%, and the highest proportion of homeowners exceeding the average tenure of 17 years, which could lead to a rise in inventory.
My Thoughts: Hartford’s affordability is a big draw. It’s a great choice if you are on a tighter budget and looking for value. The fact that many homeowners have been there for a while could mean good opportunities in 2025, with homes potentially coming on the market.

6. Indianapolis-Carmel-Anderson, Indiana

Average Home Price: $223,261
Why it’s Hot: Indianapolis is another market with a good amount of affordable housing, with nearly 42% of homes priced under $236,000. The area has strong job growth and fewer locked-in homeowners.
My Thoughts: Indianapolis is definitely one of the more affordable metros on this list. The strong job growth and ample supply of homes makes it a good choice for those looking to get into the housing market.

7. Kansas City, Missouri-Kansas

Average Home Price: $233,826
Why it’s Hot: Kansas City has a favorable market due to a generally lower average mortgage rate, lower share of locked-in homeowners and affordable prices, with an average price of $233,826. About 30% of the millennial population can afford to buy in the area.
My Thoughts: Kansas City has a good mix of affordability and economic opportunity. It’s definitely worth considering, as the city is attracting many young people looking to get into the housing market for the first time.

8. Knoxville, Tennessee

Average Home Price: $350,614
Why it’s Hot: Knoxville is a hot market, where approximately 50% of those moving in buy homes. The average home value of $350,614 makes it a comparatively affordable option, especially when you consider its location at the foothills of the Great Smoky Mountains.
My Thoughts: Knoxville has a desirable lifestyle along with growing demand for housing. If you want to buy a home in an area with an outdoor lifestyle and affordable home prices, then Knoxville will be on your radar.

9. Phoenix-Mesa-Chandler, Arizona

Average Home Price: $414,977
Why it’s Hot: With an average home value of $414,977, the Phoenix area offers relatively affordable housing, lower cost of living, and strong job growth. Phoenix has become a popular place for people, particularly from California, to move to.
My Thoughts: Phoenix continues to grow and attracts many new residents from expensive coastal areas. If you’re looking for an area with a warm climate, affordability, and a lot of job opportunities, Phoenix may be the place for you.

10. San Antonio-New Braunfels, Texas

Average Home Price: $250,834
Why it’s Hot: San Antonio has a growing job market and the average home price of $250,834 is below the national average. The cost of homes has decreased over the past year and the city continues to see a steady stream of new residents.
My Thoughts: San Antonio is one of the fastest growing cities in the U.S. and the data suggests that the housing market is booming there. This is another market I’d be keeping an eye on due to its job growth and reasonable prices.

We have also selected cities with their approaches to rental property ROI, highlighting the differences by region, comparing ROI, property prices and rental yields across cities.

The Future of Housing Success with Connekter

As we navigate the complexities of the 2025 housing market, one thing is clear: success in real estate requires a blend of strategic insight and cutting-edge technology.

This is where Connekter stands out. Designed to address the very challenges highlighted throughout this article—low inventory, affordability concerns, and competitive market conditions—Connekter empowers real estate professionals to thrive.

Here’s how Connekter can make a difference:

Precise Market Insights: Stay ahead of trends with data-driven projections on pricing, inventory, and buyer behavior. Imagine being able to anticipate shifts in markets like Boston or Phoenix before they happen.

Advanced Buyer Targeting: By analyzing demographic and economic patterns, Connekter identifies high-potential buyer segments, enabling tailored outreach that converts leads faster.

Optimized Listings and Marketing: Connekter helps craft listings that resonate with buyers, incorporating local market strengths like affordability in Indianapolis or job growth in Charlotte.

Faster Turnaround: With Connekter’s streamlined lead management tools, clients have reduced the time their properties sit on the market by up to 20%.

In a world where every edge counts, Connekter transforms data into actionable strategies, giving agents and brokers the power to drive sales, attract buyers, and navigate changing markets with confidence. For anyone looking to not just survive but thrive in 2025, Connekter is the ultimate partner. Let us know what other topics you’d like us to cover!

Extra resources:

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How I Boosted My Real Estate Business with Connekter. Read more…
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Integrating Cold Calling with Lead Generation Using Connekter. Learn more…

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