About Marco Santarelli

Are you keeping a close eye on the housing market? The National Association of Realtors (NAR) recently shared their forecast, and it looks like they're predicting a 3% growth in national median home prices in 2025. In short, while the market has seen some ups and downs lately, experts at NAR believe home prices will see a modest increase next year.

Latest Housing Market Predictions for 2025 and 2026 by NAR

Now, I know what you might be thinking. We've seen some pretty wild swings in the housing market over the past few years. Interest rates have gone up, and for a bit, it felt like things might really cool down. But according to NAR Chief Economist Lawrence Yun, a “nuclear crash” in home prices isn't on the horizon. Speaking at a recent Realtors Legislative Meetings event, Yun pointed to a few key reasons why he expects this moderate growth.

Why the Optimism? Digging Deeper into the NAR Forecast

It's never enough to just hear a number, right? We want to know the “why” behind it. Yun's forecast for this 3% median home price increase in 2025 isn't pulled out of thin air. It's based on a combination of factors that he anticipates will shape the market in the coming year. Let's break down some of the key elements of his prediction:

• Anticipated Rebound in Home Sales: Despite a slower start to 2025 than initially expected, Yun believes that both existing-home sales and new-home sales will pick up steam. His forecast suggests a 6% increase in existing-home sales and a significant 10% jump in new-home sales compared to 2024. This increase in activity can naturally put some upward pressure on prices.
• Easing Mortgage Rates: This is a big one. For many potential homebuyers, mortgage rates are the make-or-break factor. Yun is predicting that mortgage rates will ease to around 6.4% by the end of 2025. This slight decrease from the higher rates we've seen could make buying a home more affordable for some, drawing more buyers into the market. As someone who remembers the impact of fluctuating interest rates firsthand, even a small dip can make a real difference in monthly payments.
• Continued Job Growth: A healthy economy often translates to a healthy housing market. NAR's forecast also includes an expectation of 1.6 million new jobs being added to the economy in 2025. More people with jobs generally means more people with the financial stability to consider buying a home.
• Low Levels of Distressed Sales: One of the biggest fears after a housing downturn is a flood of foreclosures driving down prices. However, Yun highlights that serious mortgage delinquencies remain low. This suggests that most homeowners are in a good position to continue paying their mortgages, reducing the likelihood of a large number of distressed properties hitting the market and significantly impacting prices negatively.

The Missing Piece: The Mortgage Rate Puzzle

As Yun himself pointed out, “The mortgage rate is the magic bullet, and we are just waiting and waiting as to when that could come down.” This really resonates with me. We've seen that even though other economic factors might be in place, higher mortgage rates can act as a significant barrier for potential buyers. The pace and extent to which these rates actually decrease will be crucial in determining if NAR's sales forecast, and consequently the price growth, materializes.

Inventory Still a Key Factor

While the NAR forecast focuses on price growth, it's impossible to ignore the ongoing issue of housing inventory. Realtor.com Chief Economist Danielle Hale, speaking at the same event, highlighted that the nation faces a housing shortage of nearly 4 million homes. In my opinion, this persistent undersupply is a fundamental factor supporting price stability and even modest growth in many markets. If there aren't enough homes to meet demand, prices are less likely to plummet.

Hale also brought up an interesting point about newly built homes often having slightly lower interest rates due to builder incentives. This is something potential buyers should definitely keep in mind. Sometimes exploring new construction can offer a bit of an edge when it comes to financing.

My Two Cents: A Cautiously Optimistic Outlook

Based on the NAR data and my own observations of the market, a 3% price growth in 2025 seems like a reasonable and cautiously optimistic prediction. The anticipated easing of mortgage rates and continued job growth are definitely positive indicators. However, the actual trajectory of mortgage rates remains the biggest uncertainty. If rates stay stubbornly high, the predicted rebound in sales might not be as strong, which could temper price growth.

Furthermore, the housing market is hyper-local. What's happening nationally might not perfectly reflect what's going on in your specific city or town. Local economic conditions, inventory levels, and buyer demand will all play a significant role in determining price movements at the local level.

What Does This Mean for You?

• For Potential Buyers: Don't panic about a sudden price surge, but also don't necessarily expect significant price drops. Keep a close eye on mortgage rate trends. If rates do start to come down, it could be a good time to jump into the market, but be prepared for potential increased competition. Explore all your options, including new constructions that might offer rate incentives. And as Danielle Hale wisely advised, shop around for a mortgage – it can really save you money in the long run.
• For Current Homeowners: A modest price increase is generally good news for your home equity. However, remember that real estate is a long-term investment. Don't make rash decisions based on short-term forecasts.
• For Sellers: If you're planning to sell in 2025, the forecast suggests a potentially more active market with modest price growth. However, it's still crucial to price your home competitively based on local market conditions.

Final Thoughts

Predicting the future of the housing market is never an exact science. There are so many interconnected factors at play. However, the latest forecast from the National Association of Realtors provides a valuable insight into what the experts are expecting. While a 3% price growth in 2025 might not be earth-shattering, it suggests a degree of stability and continued moderate appreciation in the housing market. As always, staying informed about your local market and understanding the broader economic trends will be key to making informed decisions.

If you've been riding the wild waves of the U.S. housing market, you know it's been anything but boring. After years of dizzying price climbs, many are wondering if what goes up must eventually… well, at least cool down a bit. According to Zillow's latest crystal ball gazing, a significant shift is indeed on the horizon: Over 600 Housing Markets Are Expected to See Price Decline by April 2026. Specifically, Zillow's data points to 608 metro areas, plus the U.S. national average, bracing for a dip in home values over the next year, by April 2026. That’s a big number, and it signals a potential breather for buyers in many parts of the country.

Housing Market Alert: Over 600 Metros Will See Prices Decline by 2026

I've been following real estate trends for a good while now, and one thing I've learned is that the market is always in motion. These forecasts, while not set in stone, give us a valuable peek into what might be coming. So, let's see what it could mean for you, whether you're looking to buy, sell, or just stay put and watch.

The National Scene: A Gentle Cooldown

First, let's look at the big picture across the United States. Zillow is forecasting a national decline in home values of 1.4% through 2025. Now, that might not sound like a massive drop, especially after the double-digit percentage increases we saw in previous years. In fact, Zillow has actually revised this number up from an earlier expectation of a 1.9% decrease, so the projected fall is a bit gentler than previously thought.

Why the downward pressure? A couple of key things are at play:

• Rising Inventory: More homes are coming onto the market. This is partly due to softer sales volume this past spring. When there are more houses for sale, buyers have more choices.
• Buyer Hesitation: Even with more options, buyers haven't been jumping in as eagerly as they typically do in the spring selling season. There's been a good bit of economic uncertainty making people cautious. The good news? Zillow thinks this uncertainty might have peaked.

Think of it like a seesaw. For a long time, there were way more buyers than sellers, pushing prices up. Now, the seesaw is starting to tilt a bit, giving buyers a little more leverage.

But Wait, Some Good News for Sellers? Existing Home Sales Edging Up

It's not all about falling prices, though. Interestingly, Zillow also projects that existing home sales will actually increase to 4.12 million in 2025. That's a 1.4% bump from 2024. This projection is a tiny bit lower than what they thought last month (4.2 million), but it's still an increase.

So, what's supporting these home sales, even if prices are softening?

• Higher Housing Supply: More choice for buyers, as we mentioned.
• Moderating Policy Uncertainty: As things become a bit more predictable on the economic front, people might feel more confident making big moves.
• Small Improvements in Housing Affordability: Even a slight dip in prices, or a stabilization of mortgage rates, can help some buyers get off the fence.

From my perspective, this suggests a market that's rebalancing rather than crashing. Homes are still selling, just not with the same frenzied bidding wars we saw a couple of years ago in many areas. It points towards a healthier, more sustainable pace, which, in the long run, is good for everyone.

Deep Dive: Which of the 600+ Markets Will See the Biggest Drops?

Now for the main event. While the national average is a modest 1.4% drop for 2025, some local markets are bracing for much steeper declines by April 2026.

It seems like many of the areas facing the most significant projected drops are smaller metro areas, particularly in states like Mississippi, Texas, and Louisiana. Let's look at a few of the most impacted, according to Zillow's forecast by April 2026:

When I see numbers like these, especially for smaller towns, I often wonder about the local economic drivers. Sometimes, these areas might have experienced a boom due to a specific industry, and if that industry slows down, housing can be impacted. Other times, it could be a correction after prices rose very quickly, or broader factors like population shifts. For instance, some of these areas in Texas might have seen activity related to the energy sector, which can be cyclical. Coastal Louisiana towns like Houma and Morgan City (projected -9.5%) are also dealing with long-term challenges like rising insurance costs and storm risks, which can certainly weigh on home values.

It's not just smaller towns, though. Some more well-known, larger metro areas are also on the list for price declines by April 2026, albeit less dramatically:

• New Orleans, LA: Expected to see a -7.1% drop. This city has unique economic and environmental factors that always make its housing market interesting to watch.
• San Francisco, CA: Projected for a -5.2% decline. After years of being one of the hottest markets in the country, driven by tech, a cooldown isn't entirely surprising. Affordability has been a huge issue here, and a price re-adjustment might be overdue.
• Austin, TX: Looking at a -3.8% fall. Austin was another red-hot market, booming with tech and transplants. This looks like a correction after an incredible run-up in prices.
• Urban Honolulu, HI: A -3.5% projected dip. Island markets have their own dynamics, often influenced by tourism and high costs of living.
• Denver, CO: Predicted to see a -3.3% decrease.
• Portland, OR: Also looking at a -3.2% decline.
• Even major hubs like Seattle, WA (-2.7%), Washington, DC (-2.6%), and Pittsburgh, PA (-2.4%) are on the list.

Top 100 U.S. Housing Markets Expected to See Predicted Price Declines

Source: Zillow Home Value Index (ZHVI) Forecast (Forecast as of April 30, 2025) Note: The percentages represent the projected change in Zillow's Home Value Index from the base date of April 30, 2025, to the date specified. This table lists selected Metropolitan Statistical Areas (MSAs) from the provided data with the largest predicted housing price declines by April 2026, plus the U.S. overall forecast.

What does this tell me? It shows that the housing market isn't one single thing. It's a collection of hundreds of local markets, each with its own story. While national trends give us a general idea, what's happening on your street or in your town can be quite different. The broad reach of these projected declines, from small MSAs to big cities, suggests a widespread rebalancing is underway. Many of these areas, especially the larger ones, saw extraordinary price growth during the pandemic-era boom. A correction in such markets can be seen as a return to more sustainable price levels.

What About Rents? A Different Story for Single-Family Homes

If you're a renter, you might be wondering if you'll catch a break too. Well, Zillow's forecast here is a bit of a mixed bag:

• Single-family rents are projected to rise by 3.2% in 2025. This forecast was actually revised upward, meaning they expect stronger growth here than before.
• Multifamily rents (think apartment buildings) are expected to increase by 2.1% in 2025.

So, while home buying prices might be easing in many places, the cost of renting, especially a single-family home, looks set to continue its upward climb. Zillow notes that even though there's an increase in the supply of rental listings, strong demand for single-family rentals will likely keep that rent growth fairly stable.

My take on this? The demand for more space, which became super popular during the pandemic, is still a factor. Also, if buying a home remains challenging for some due to affordability or mortgage rates, they'll likely stay in the rental market longer, keeping demand (and prices) up, especially for those desirable single-family rentals.

So, What Does This All Mean for YOU?

This is the million-dollar question, isn't it? Let's break it down.

For Home Buyers:

If you're looking to buy, this forecast could bring a sigh of relief.

• More Options & Less Competition: Rising inventory means you might not have to make a snap decision or get into crazy bidding wars. You'll have more time to find the right home.
• Potential for Better Deals: In those 600+ markets, falling prices could mean homes become more affordable. You might have more negotiating power with sellers.
• Caution is Key: Don't try to “time the market” perfectly – it's nearly impossible. If prices are falling, you want to be careful not to buy a home that continues to lose significant value. However, if you're buying for the long term (5-7 years or more), short-term fluctuations matter less.
• My Advice: Focus on what you can afford. Get pre-approved for a mortgage so you know your budget. Work with a good local real estate agent who understands the specific conditions in your target neighborhood. Even if prices are projected to fall nationally or in your broad metro, your specific desired neighborhood could behave differently.

For Home Sellers:

If you're thinking of selling, especially in one of the markets expecting a decline, you'll need to be realistic.

• Adjust Expectations: The days of naming any price and getting multiple offers over asking might be on pause in some areas.
• Price Competitively: Your home will need to be priced right from the start to attract serious buyers. Overpricing in a cooling market can lead to your home sitting for a long time.
• Presentation Matters: With more inventory, making your home shine (good staging, repairs, curb appeal) will be even more important.
• My Advice: Don't panic! Homes are still selling. The projected increase in existing home sales shows there's still demand. Get a comparative market analysis (CMA) from a local agent to understand current values. If you don't have to sell right away, you could consider waiting, but there's no guarantee what the market will do next.

For Renters:

The news isn't as rosy here, especially if you're eyeing a single-family rental.

• Expect Rent Hikes: With rents projected to rise, especially for single-family homes, be prepared for potential increases when your lease is up for renewal.
• Competition for Good Rentals: Strong demand means you might still face competition for desirable rental properties.
• My Advice: If you're in a good rental now and can lock in a longer lease at a decent rate, it might be worth considering. If you're looking to move, start your search early and be prepared to act fast when you find something you like.

My Outlook on the Forecast:

As someone who's watched these market cycles come and go, the biggest takeaway for me from Zillow's forecast is that we're heading into a period of rebalancing. The frenetic pace of the past few years was unsustainable. A market where prices cool a bit, inventory rises, and buyers have more breathing room is, in many ways, a healthier market.

Remember, these are forecasts. The actual numbers could be different. So many things can influence the housing market:

• Interest Rates: The big one! If mortgage rates come down significantly, it could boost buyer demand and change these price trajectories.
• The Economy: Job growth, inflation, and overall economic confidence play a huge role.
• Local Factors: Always, always, always remember that real estate is local. A new major employer moving into a town can boost its housing market, while a major employer leaving can have the opposite effect, regardless of national trends.

It’s crucial to look beyond the headlines and understand the specific dynamics of the area you're interested in. The prediction that Over 600 Housing Markets Are Expected to See Price Decline by April 2026 is a significant indicator of a broader cooling trend, but your personal real estate journey will depend on your individual circumstances and your local market conditions.

Stay informed, do your homework, and make the decisions that are right for you. The housing market is always an adventure!

If you're wondering what the future holds for the housing market, especially if you're planning to buy or sell, here's the headline: Zillow predicts a slight dip. Specifically, forecasts suggest the housing market forecast projects decline in home values by 1.4% in 2025.

But, of course, the real story is much more nuanced than just a single percentage. It's about understanding why this is happening, what it means for you, and what to watch out for.

Housing Market Predictions: Home Prices to Drop 1.4% in 2025

Why the Projected Decline?

So, what's the deal with this slight decrease? Well, several factors are working together to create this forecast. It all boils down to basic economics: supply and demand.

• Rising Inventory: Think of it like this: more houses on the market mean buyers have more to choose from. And when buyers have options, sellers have to compete, often by lowering their prices. We're seeing this play out as more homeowners decide it's time to sell.
• Mortgage Rate Anxiety: Remember those super-low mortgage rates we got used to? They are gone! The fact that mortgage rates are significantly higher than rates from just a few years ago has a big impact on what people can afford. Higher rates mean higher monthly payments, which naturally cools buyer enthusiasm.
• Labor Market Uncertainty: People are generally hesitant to make big financial decisions, like buying a home, when they're worried about their jobs. Any hints of instability in the labor market make potential homebuyers pause and reconsider their plans.

What This Means for You (Buyer or Seller)

Now, the 1.4% decline isn't exactly a crash. It's more of a gentle correction. But even a slight shift in the market can have real-world consequences depending on which side of the transaction you are on.

• For Buyers: This decline could be good news! A slight dip in home values might mean you have more negotiating power. You may find you can get a bit more house for your money, or at least avoid getting caught in a fierce bidding war. It also means you can take a little extra time to find the perfect home, rather than feeling rushed.
• For Sellers: The prospect of declining home values might feel a bit unsettling. This doesn't mean you won't be able to sell your home, but it emphasizes the importance of pricing it strategically. In this kind of market, you need to be realistic about what your home is worth and be prepared to negotiate. It might also take a little longer to sell.

Existing Home Sales: A Glimmer of Hope

While home values are projected to decline, there's a bit of good news on the sales front:

• According to Zillow, existing home sales are expected to reach 4.14 million in 2025, up from around 4.12 million.
• This represents a 1.9% increase year on year.

What does this mean? Basically, despite the downward pressure on prices, people are still buying homes. The rise in inventory is also helping sales as it provides more negotiating leverage for buyers.

The Rent Forecast: What's Happening with Rental Prices?

The forecast isn't just about buying; it also looks at rental prices. And here, the picture is a bit more muted than it has been in recent years:

• Single-family rents are expected to rise by 2.8% in 2025.
• Multifamily rents are projected to increase by 1.6%.

Why the more modest growth? A lot of it has to do with new construction. A wave of new apartments and rental houses has entered the market, providing more options for renters and, as a result, easing the pressure on rental prices. Increased inventory, combined with signs of cooling in the overall housing market, are putting downward pressure on rent growth.

Factors You Need to Watch Closely

While these forecasts provide a valuable snapshot of what the experts expect, I believe the situation is always unfolding and evolving. Here are a few things I'll be keeping a close eye on:

• Mortgage Rates: These are the wild card. Even a small shift in mortgage rates can have a big impact on buyer demand. If rates drop unexpectedly, we could see a resurgence in the housing market.
• Inflation: Inflation remains a key economic indicator. If inflation continues to cool and the Federal Reserve responds by decreasing interest rates, it would positively impact housing market affordability and demand.
• The Economy: A strong economy generally means a healthy housing market. Closely monitor job growth, consumer confidence, and overall economic growth.
• Local Market Conditions: Real estate is hyper-local. What's happening nationally doesn't necessarily reflect what's happening in your specific city or town. Pay attention to local market trends, like inventory levels, days on market, and sale-to-list price ratios.

Why Should You Trust These Forecasts?

It's always smart to be skeptical of any prediction, including these housing market forecasts. However, firms like Zillow invest heavily in data analysis and have a team of experts dedicated to understanding the housing market. Their forecasts are based on sophisticated models that take into account a wide range of economic factors.

The bottom line: While every forecast has a margin of error, these predictions offer a valuable starting point for making informed decisions about buying, selling, or renting a home in 2025.

My Two Cents: It's All About Perspective

In my professional opinion, the most important thing is not to fixate on a single number, but to understand the underlying trends and how they might affect you. Whether you're a buyer or a seller, do your homework, talk to a local real estate professional, and focus on making smart, informed decisions that are right for your specific circumstances. This isn't a time to panic! It's a time to be informed and plan ahead.

Remember these factors:

I really hope this clarifies the forecast and helps you take the best plan for yourself.