Are you curious about what 2025 holds for the housing market, especially here in North County San Diego? Whether you’re planning to buy or sell, the best way to stay informed is to rely on the experts.
With professionals constantly revising their forecasts, here’s the latest on two key factors expected to shape the market: mortgage rates and home prices. Let us help you navigate what these changes mean for your goals in our vibrant local market!
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):
It’s important to remember that the housing market is dynamic, and changes will continue as new information emerges. Expert forecasts are based on the current data, but factors like inflation and economic shifts will likely lead to some ups and downs in mortgage rates. Rather than trying to time the market or fixate on exact numbers, focus on the overall trends and what you can control in your home-buying or selling journey.
At Shafran Realty Group, we’re here to be your trusted guide. Partnering with a knowledgeable lender and our experienced team ensures you always have the latest data and personalized insights. Even a small decline in mortgage rates can significantly impact your future payment, and we’ll help you navigate the market to make the most of these opportunities.
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 that the housing market is highly localized, meaning trends can vary significantly from one area to another. Some markets may experience higher price growth, while others could see prices stabilize or even dip slightly if inventory increases. However, in most areas, prices are expected to continue rising, as they typically do over time.
To understand what’s happening in your local market—especially in North County San Diego—rely on the expertise of Shafran Realty Group. Our team can provide insights into the latest trends and explain how they may impact your specific plans. Let us help you make informed decisions tailored to your goals and neighborhood.
Bottom Line
The housing market is always evolving, and 2025 will be no exception. With mortgage rates expected to ease slightly and home prices rising at a more sustainable pace, staying informed and having a solid plan is essential.
Let’s connect to discuss what’s happening in North County San Diego and how to make your next move a smart one. Whether you’re buying, selling, or simply exploring your options, Shafran Realty Group is here to guide you every step of the way. Reach out today!