Skip to main content

The Biggest Real Estate Forecasts for the Second Half of 2025

 Can you believe we’re already halfway through 2025?

As we head into the second half 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 Connecticut

Home Price Forecasts

Most housing economists agree: prices will rise, but not by much. And depending on where you live, they could even decline.

June 2025 HOME PRICE GROWTH FORECAST.png

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.

❗[Insert your local market insights here: Are prices up, down, or flat in your area? Which neighborhoods or price points are performing best?]

Existing Home Sales Outlook

Sales activity is expected to grow this year, but recovery will be gradual.

June 2025 EXISTING HOME SALES FORECAST.png

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. 

❗ [Insert local sales trends here: Are you seeing more listings, longer DOM, or growing buyer interest in your market?]

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.

June 2025 MORTGAGE RATE FORECAST.png

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.

❗[Include your insight: How are buyers in your market responding to current rates?]

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 Hartford County, let’s talk. I'm happy to break down what’s happening and how it could impact your plans to buy or sell.

Lavanya 

Real Estate Investor & Agent

Lets Connect via Facebook, Instagram & Threads

Labels:

Comments

Post a Comment

Popular posts from this blog

Tax Appeal Season in CT: How to Lower Your 2026 Property Taxes Before February 1

 Every few years, many Connecticut municipalities re-assess all real estate — and 2025 marks one of those major revaluation cycles for dozens of towns. If your town just sent you a new valuation, this means your 2026 property taxes could be based on a significantly increased assessment — unless you act quickly. But there is good news. If you catch it in time, you can challenge that assessment and potentially reduce your 2026 property taxes. Here’s exactly how to do it, and what every homeowner in Connecticut should know before February 1. 🕒 Why Timing Is Critical: The CT Tax Calendar Municipal assessments are based on a fixed “grand list,” usually effective October 1 of the revaluation year. Once your town finalizes the grand list (often by January 31), assessment notices go out — and that triggers the official appeal season.  Under state law, you must file a written appeal with your local Board of Assessment Appeals (BAA) by February 20 .  In some years...
Post a Comment
Read more

Navigating Evictions in Connecticut - The Harsh Realities for Landlords and Investors

As a seasoned real estate investor with over a decade of experience managing rental properties across the Northeast, I've seen firsthand how state policies can make or break the viability of rental investments and still dealing through the process. Lately, there's been a lot of chatter online and in the media about skyrocketing rents in Connecticut, with many pointing fingers at "greedy landlords" for pricing people out of the market. While I empathize with tenants facing affordability challenges—especially in a state where homelessness has surged 45% in recent years—the narrative often overlooks the crushing economic pressures on property owners. In this post, I'll dive deep into evictions in Connecticut, drawing from my own cost-benefit analysis of rental ownership here. We'll cover the eviction process and timelines, pros and cons from both landlord and tenant perspectives, and the raw math behind making a deal profitable (or why many aren't). My goal? ...
Post a Comment
Read more

2025 Year-in-Review: Biggest Sales & Surprises in the CT Market

As 2025 winds down and we turn the page toward another pivotal year in Connecticut real estate, it’s clear that this past year delivered more than rising prices and record-low inventory. The CT market experienced rapid regional shifts, notable luxury sales, surprising affordability pockets, and behavior changes driven by new lending rules, demographic migration, and evolving buyer psychology. Here’s your expert deep-dive into the biggest sales, shocks, and storylines that defined the Connecticut housing market. 📈 1. Prices Rose — But Not Where You Expected While Fairfield County continues to dominate headlines (and average sales numbers), the biggest year-over-year price jumps didn’t happen in Greenwich or Westport. Top 2025 Appreciation Markets (Single-Family) Windham County — Young buyers and hybrid workers fueled double-digit appreciation. Middlesex County — Chester, Essex, and Clinton saw spillover demand from shoreline towns. New Haven County — Hamden, Branfor...
Post a Comment
Read more