What’s In Store For The Housing Market This Year:
Experts are constantly updating and revising their forecasts, so here’s the latest on two of the biggest factors expected to shape the year ahead: mortgage rates, home prices, and home sales.
1. Will Mortgage Rates Come Down?
Everyone’s keeping an eye on mortgage rates and waiting for them to come down. So, the question is really: how far and how fast? The good news is they’re projected to ease a bit in 2025. But that doesn’t mean you should expect to see a return of 3-4% mortgage rates. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), says:
“Are we going to go back to 4%? Per my forecast, unfortunately, we will not. It’s more likely that we’ll go back to 6%.”
And the other experts agree. They’re forecasting rates could settle in the mid-to-low 6% range by the end of the year (see chart below):
But you should remember, this will continue to change as new information becomes available. Expert forecasts are based on what they know right now. And since everything from inflation to economic drivers have an impact on where rates go from here, some ups and downs are still very likely. So, don’t get caught up in the exact numbers here and try to time the market. Instead, focus on the overall trend and on what you can actually control.
A trusted lender and an agent partner will make sure you’ve always got the latest data and the context on what it really means for you and your bottom line. With their help, you’ll see even a small decline can help bring down your future mortgage payment.
2. Will Home Prices Fall?
The short answer? Not likely. While mortgage rates are expected to ease, home prices are projected to keep climbing in most areas – just at a slower, more normal pace. If you average the expert forecasts together, you’ll see prices are expected to go up roughly 3% next year, with most of them hitting somewhere in the 3 to 4% range. And that’s a much more typical and sustainable rise in prices (see graph below):
So don’t expect a sudden drop that’ll score you a big deal if you’re thinking of buying this year. While that may sound disappointing if you’re hoping prices will come down, refocus on this. It means you won’t have to deal with the steep increases we saw in recent years, and you’ll also likely see any home you do buy go up in value after you get the keys in hand. And that’s actually a good thing.
And if you’re wondering how it’s even possible prices are still rising, here’s your answer. It all comes down to supply and demand. Even though there are more homes for sale now than there were a year ago, it’s still not enough to keep up with all the buyers out there. As Redfin explains:
“Prices will rise at a pace similar to that of the second half of 2024 because we don’t expect there to be enough new inventory to meet demand.”
Keep in mind, though, the housing market is hyper-local. So, this will vary by area. Some markets will see even higher prices. And some may see prices level off or even dip a little if inventory is up in that area. In most places though, prices will continue to rise (as they usually do).
If you want to find out what’s happening where you live, you need to lean on an agent who can explain the latest trends and what they mean for your plans.
3. Home Sales
After a slight decline in 2024 due to limited inventory, total home sales in the Kansas City area are expected to rebound by 4-5% in 2025 taking us back to pre-pandemic steady rates.
Additionally, the National Association of Realtors® has identified Kansas City as one of the top housing hot spots for 2025, citing factors such as available inventory at affordable price points, favorable financing environments, and higher income growth for young adults.
Overall, the Kansas City housing market is expected to remain robust in 2025, characterized by rising home sales, appreciating property values, and increased construction activity.
HELPFUL TIPS TO INCREASE YOUR SALES PRICE
5 Things To Do in 2025 to Increase Your Sales Price
1. Embrace Smart Home Features…
- Why: Buyers are increasingly drawn to homes with integrated technology for convenience and energy efficiency.
- What to Do:
- Install smart thermostats, security systems, lighting, and energy-efficient appliances.
- Highlight these features in your listing.
2. Focus on First Impressions…
- Why: Curb appeal continues to be a critical factor in attracting buyers.
- What to Do:
- Refresh landscaping with native, low-maintenance plants.
- Power wash driveways and sidewalks.
- Repaint the front door and maintain the exterior.
3. Optimize for Energy Efficiency…
- Why: Rising utility costs make energy-efficient homes more desirable.
- What to Do:
- Add insulation or upgrade windows.
- Obtain a home energy audit and showcase improvements in the listing.
- Consider solar panel installation, where feasible.
4. Modernize Interior Spaces…
- Why: Modern, functional spaces can make your home stand out.
- What to Do:
- Update kitchens and bathrooms with fresh finishes or fixtures.
- Declutter and stage your home with neutral, modern decor. Watch our videos about home staging here.
- Repaint walls in soft, trendy colors that appeal to a wide audience.
5. Price Strategically and Leverage Market Timing…
- Why: Accurate pricing and good timing maximize interest and reduce time on the market.
- What to Do:
- Consult with a trusted real estate professional to assess your home’s value. Get your free home wealth report here!
- List during peak buying seasons, such as late spring or early fall.
- Use recent market data to price competitively but attractively. Contact us to discuss.
Bottom Line
The housing market is always shifting, and 2025 will be no different. With rates likely to ease a bit and prices rising at a more normal and sustainable pace, it’s all about staying informed and making a plan that works for you.
Reach out to a local real estate pro to get the scoop on what’s happening in your area and advice on how to make your next move a smart one.
