Where is the Housing Market Headed Through the End of 2025?

Although active inventory has increased, home sales are projected to reach a 30-year low by the end of 2025
July 23, 2025
2 min read
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Row of new-construction homes
Through the remainder of the year, the housing market is expected to see less sales despite more available inventory.

Over the past six months, home sales have been trending downward, while mortgage rates and home prices remain elevated. This activity is expected to remain consistent through the remainder of 2025, according to real estate marketing platform Realtor.com's 2025 housing market forecast. 

Although more homes are expected to be on the market through the end of the year, the increase in inventory isn't necessarily leading to more sales. High mortgage rates and steep home prices are making affordability a major challenge for would-be buyers, keeping many out of the market altogether. In fact, home sales are anticipated to reach a 30-year low by the end of 2025. Additionally, mortgage rates are predicted to stay higher than previously thought, averaging 6.7% for the entirety of the year and ending 2025 at around 6.4%. 

Even with more homes on the market, buyer response has remained muted compared to what we’d expect from similar supply shifts in the past.

- Danielle Hale, chief economist of Realtor.com

Where is the new-construction market headed?

At the start of the year, Realtor.com projected a 13.8% annual gain in housing starts, but with affordability concerns sidelining buyers and builders dealing with ongoing economic challenges, that forecast was revised.

By the end of 2025, it is expected that single-family housing starts will fall by 3.7% from last year to just 980,000.

The existing-home market is also expected to see less sales

Sales in the existing-home market were also revised to be lower than previously thought in the beginning of 2025. While projected then to grow slightly this year compared with 2024, existing-home sales are now expected to fall by 1.5% annually to 4 million sales. If that figure holds true, this would be the slowest year for existing-home sales since 1995, when 3.8 million existing-home sales were recorded.

How do these projections compare with the 2024 housing market?

 
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