Home prices could climb 2% in 2025 and an additional 2% in 2026, according to the latest forecast from the National Association of Realtors.
The group’s economist, Lawrence Yun, projected the median U.S. home price would continue to increase in 2025, but at a slower pace compared to previous years, reaching a $410,700 median existing-home price. The median home price in November stood at $406,100.
“Home price growth could be more muted, more modest,” Yun said. “Maybe it’s a healthy thing, we want income to catch up with home prices, maybe giving a couple years or more of lighter price growth may be a good thing.”
At the group’s annual summit, Yun said he expected the Federal Reserve to maintain a gradual approach to easing monetary policy in 2025.
“While concerns about federal deficits and rising public debt may cap the extent of those rate cuts, borrowing costs are anticipated to stabilize overall, offering some relief to prospective buyers,” according to the forecast.
NAR forecasts that mortgage rates will stabilize near 6% in 2025, which it expects to become the “new normal.”
At this rate, more buyers are expected to come back to the market, boosting activity, and the association projects 4.5 million existing-home sales in 2025. In November, the yearly sales pace was at 4.15 million units.
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Inflation
