What To Expect From Mortgage Rates and Home Prices in 2025

Are you curious about where the North County San Diego housing market is headed in 2025? The good news is that experts are forecasting promising trends, especially regarding two key factors: mortgage rates and home prices. Whether you're planning to buy or sell in North County, here's what the experts predict and how it could impact your next move.

Mortgage Rates Are Forecasted To Come Down

One of the biggest factors likely affecting your plans is mortgage rates, and the forecast looks positive. After rising dramatically in recent years, experts project rates will ease slightly throughout 2025 (see graph below):

While that decline won’t be a straight line down, the overall trend should continue over the next year. Expect a few bumps along the way, because the trajectory of rates will depend on new economic data and inflation numbers as they’re released. But don’t get too hung up on those blips and reactions from the market as they happen. Focus on the bigger picture.

Lower mortgage rates mean improving affordability. As rates come down, your monthly mortgage payment decreases, giving you more flexibility in what you can afford if you buy a home.

This shift will likely bring more buyers and sellers back into the market, though. As Charlie Dougherty, Director and Senior Economist at Wells Fargo, explains:

“Lower financing costs will likely boost demand by pulling affordability-crunched buyers off of the sidelines.”

As this unfolds, both inventory and competition among buyers in North County San Diego will increase. The key takeaway? You have the chance to get ahead of the competition now. Lean on Shafran Realty Group to ensure you understand how shifting mortgage rates are impacting demand in North County San Diego, so you can make the best move for your situation.

Home Price Projections Show Modest Growth

While mortgage rates are expected to come down slightly, home prices are forecast to rise—but at a much more moderate pace than the market has seen in recent years.

Experts are saying home prices will grow by an average of about 2.5% nationally in 2025 (see graph below):

This is far more manageable than the rapid price increases of previous years, which saw double-digit percentage growth in some markets.

What’s behind this ongoing increase in prices? Again, it has to do with demand. As more buyers return to the market, demand will rise – but so will supply as sellers feel less rate-locked.

More buyers in markets with inventory that’s still below the norm will put upward pressure on prices. But with more homes likely to be listed, supply will help keep price growth in check. This means that while prices will rise, they’ll do so at a healthier, more sustainable pace.

Of course, these national trends may not exactly reflect what's happening in North County San Diego. Some neighborhoods may experience faster price growth, while others could see more gradual changes. As Lance Lambert, Co-Founder of ResiClub, says:

“Even if the average national home price forecast for 2025 is correct, it’s possible that some regional housing markets could see mild home price declines, while some markets could still see elevated appreciation. That has been, after all, the case this year.”

Even in the few North County San Diego markets that might see flat or slightly lower prices in 2025, recent appreciation means the effect may be minimal. That’s why it’s essential to partner with a local expert like us at Shafran Realty Group, who can provide a clear picture of what's happening in the area you're considering buying or selling.

Bottom Line

With mortgage rates expected to ease and home prices projected to rise more gradually, 2025 looks promising for both buyers and sellers in North County San Diego. If you're wondering how these trends might affect your plans, let’s connect. The team at Shafran Realty Group is here to help you navigate the market and make the most of the opportunities ahead.