After two years of limited activity and heightened affordability concerns, the housing market is entering 2025 with signs of renewed strength. Industry forecasts from the National Association of REALTORS® project that existing home sales could rise between seven percent and twelve percent this year. This growth, while measured, reflects a noticeable shift in momentum as both buyers and sellers adapt to a changing economic landscape.
Price growth is also expected to continue, though at a slower and more sustainable pace. The median existing home price is projected to reach approximately four hundred ten thousand seven hundred dollars, representing about a two percent increase year over year. This moderation in appreciation, combined with an anticipated stabilization of mortgage rates, is helping to create an environment that encourages more buyer participation without triggering the overheated competition seen in previous cycles.
Several metropolitan areas stand out as leaders in this rebound. Cities such as Boston, Phoenix, Charlotte, San Antonio, Indianapolis, Grand Rapids, Greenville, Hartford, Kansas City, and Knoxville are expected to see above-average performance. These markets share a blend of strong job creation, steady population growth, and housing supply that, while still tight, is improving. The result is a healthier balance between demand and inventory, allowing more transactions to move forward.
For buyers, this environment means more options and potentially better negotiating conditions in certain price brackets. According to Realtor.com, national listing inventory was up more than thirty percent year over year in May 2025. This expansion in available homes provides greater choice, especially for those who had paused their search in recent years due to limited selection or intense bidding wars.
Mortgage rates, while still higher than historic lows, are expected to hold near six percent for much of the year. This level represents a psychological improvement for many would-be buyers compared to the volatility of the past two years. Even modest rate stability has the potential to unlock pent-up demand, particularly in markets where wage growth and cost of living remain in favorable balance.
For real estate professionals, the opportunity lies in recognizing the unique strengths of each of these top-performing markets and tailoring marketing strategies to the specific needs of their local buyer pool. In some areas, the focus may be on highlighting lifestyle amenities and long-term appreciation potential, while in others it may center on affordability and financing flexibility. Understanding these nuances will allow agents to guide clients effectively, capture renewed interest, and help convert market optimism into completed transactions.
