For potential homebuyers, the U.S. housing market is hard to read right now.
Affordability remains an obstacle, with elevated mortgage rates and a median home price of $442,000 — up 0.9% from a year ago, according to Redfin data.
However, inventory is rising in many markets, especially in the South, giving buyers more leverage to negotiate prices. Redfin expects home prices to decline 1% year over year by the end of 2025, a forecast that aligns with Zillow’s projected 1.4% drop over the same period.
Overall, the market is “a mixed bag,” says Ben Jacobs, a real estate broker with Douglas Elliman. “On one hand, we’re seeing more inventory and seller concessions, which offer some breathing room for buyers. On the other, mortgage rates aren’t expected to drop significantly anytime soon, which continues to impact affordability.”
Most major forecasts expect 30-year fixed mortgage rates — currently around 6.85% — to stay above 6% throughout the year, consistent with where they’ve been so far in 2025:
