Curious about what the housing market has in store for 2025? Whether you’re considering buying or selling a home, staying up-to-date with industry professionals can help guide your decisions. At Jones Hollow Realty Group, we’re here to provide you with the latest insights, especially if you’re thinking about the Long Island market.
Two of the biggest factors likely to shape the housing market this year are mortgage rates and home prices. Here’s what you need to know:
Will Mortgage Rates Come Down?
Many people are hoping for a decrease in mortgage rates, but the question remains: how far and how fast will they drop? The good news is that industry professionals expect mortgage rates to ease somewhat in 2025. However, don’t expect a return to the low 3-4% rates that we saw in previous years. Instead, it’s more likely that mortgage rates will settle in the mid-to-low 6% range by the end of the year. While not a drastic drop, these rates are still more favorable than the highs we saw in 2024. If you’re in the market to buy or refinance on Long Island, these trends could have a direct impact on your decision.
Will Home Prices Fall?
Unfortunately, a significant drop in home prices isn’t expected in 2025. While mortgage rates are projected to ease, home prices are expected to continue climbing – just at a slower and more sustainable pace. Industry professionals predict a modest rise of about 3%, with most forecasts ranging between 3-4%. This marks a return to a more typical pace of appreciation, after the rapid increases seen in the past few years.
For those hoping to score a deal with a sudden drop in prices, this may be disappointing news. However, the silver lining is that you likely won’t experience the same steep increases in price that we saw in recent years. In fact, any home you purchase is likely to increase in value over time, making it a solid investment. On Long Island, where demand remains strong, this trend is expected to continue.
How can prices still be on the rise? It’s simple: supply and demand. While there are more homes for sale compared to last year, it’s still not enough to meet the demand from buyers. Prices are expected to rise at a pace similar to the second half of 2024 due to the ongoing imbalance between supply and demand. This is especially true in sought-after areas on Long Island, where the competitive market is expected to remain steady.
However, keep in mind that the housing market is highly localized. In some areas, prices may increase more sharply, while other regions could see prices stabilize or dip if inventory is higher.
Bottom Line
The housing market is always evolving, and 2025 will be no exception. With mortgage rates likely to ease slightly and home prices rising at a more balanced rate, it’s important to stay informed and make plans that suit your goals.
At Jones Hollow Realty Group, we’re committed to keeping you updated with the latest market trends, particularly on Long Island, where we specialize. To get the latest insights and expert advice tailored to your area, connect with one of our local real estate professionals. We’ll help you navigate the market and make your next move a smart one.