REDFIN PRICE FORECAST

Redfin forecasts that U.S. home prices will stay flat or dip by about 1% by the end of 2025, mainly due to persistently high mortgage rates around 7%. This marks a shift from the previous decade’s steady price growth, as elevated rates have cooled demand and increased the number of sellers relative to buyers. Home prices have already dropped 1.1% year-over-year as of April, with homes taking longer to sell and inventory reaching a five-year high.

Economic uncertainty and higher inventory levels have shifted negotiating power to buyers, who can now secure deals and concessions—especially from sellers who bought at peak prices and are now forced to lower expectations. Regional differences persist: the Sunbelt, with more new construction, has seen the biggest price declines, while the Northeast and Midwest have experienced price gains.

For investors, the key to success is negotiating for discounts and using cash when possible, as high interest rates make cash flow difficult. Baby boomers, who have more cash on hand, now make up the largest share of homebuyers. Ongoing tariffs continue to push up costs and keep interest rates high, adding further pressure to the housing market’s stagnation.

Source: Redfin