With 2025 just around the bend, the real estate market remains a mystery for both current homeowners and would-be buyers. Predictions over home price trends have always been up for debate, especially in such a complex housing landscape shaped by fluctuating mortgage rates, rising costs, and shifting inventory levels. This article examines the latest insights from CoreLogic and other forecasts, putting into light where home prices might be headed.

A Market at the Crossroads

In a nutshell, the US housing market was resilient in 2024 amid challenges in affordability. The high mortgage rates, increased property taxes, and surging insurance premiums tested buyers and sellers alike. On the whole, national home prices-evidenced by the CoreLogic Home Price Index, at an annual rise of 3.4% in October 2024-have been resilient. But what happens in 2025? Does it stay on that steady uphill trek, or is this as good as it gets?

The Predictions and Their Context

CoreLogic 2025 Forecast

CoreLogic, one of the leading real estate data analytics firms, predicts that house prices would increase by up to 2.4% in the next 12 months. Although that figure suggests solid gains, it actually is slower than the annualized 4% appreciation throughout 2024. Driving forces of the tempered forecast include higher mortgage rates and inventory.

As Selma Hepp, chief economist for CoreLogic, explained, “We did start off the year with higher expectations for 2025, but now we have lower expectations.

This view is supported by the “long-term reversion to the mean” principle, whereby market growth ultimately settles down around historical averages. Still, exogenous factors, such as income disparity and high borrowing costs, may dampen such growth even further.

What to Expect in the Housing Cycle

Spring traditionally has been a peak season of homebuying and usually sets the pace for the annual price trends. However, CoreLogic projects the spring buying season of 2025 to show nearly flat price growth, while appreciation rates could be in the range of 1%-2% by later in the year. Such sluggish growth is a sign of the drag caused by current economic headwinds.

He projects that 2025 may not see an increase in sales transactions, but there is a possibility that 2026 will bring new waves if mortgage rates go back down. The possible loosening of borrowing costs, he said, may lure more buyers off the sidelines and push up demand, leading to price momentum.

How does CoreLogic’s forecast compare?

The average forecast for U.S. home price growth in 2025 was 3.5% among 16 leading forecasts tracked by ResiClub, just above CoreLogic’s estimate and below the double-digit growth rates seen over the past few years. What’s interesting is that the forecasts diverge based on the assumptions regarding key variables like interest rates, inventory levels, and economic conditions.

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The Big Picture

Slowing home price growth in 2025 reflects a broader market correction after the pandemic-era housing boom. Historically low interest rates during the pandemic created an unprecedented surge in demand, which overshot supply and forced prices to skyrocket. The normalization of mortgage rates to now elevated levels and a gradual rise in inventory finally set the market into a normalizing phase.

Comparing the U.S. Housing Market with Global Trends

Interestingly, the U.S. housing market is not insulated; rather, it is fairly comparative to other developed nations in similar situations of unaffordability. For instance, countries like Canada and Australia have also found that higher interest rates and reduced access to lending have cooled once-hot markets. While there are some differences in local dynamics, the universal theme is one of “cooling off”.

Why This Matters to Buyers and Sellers? To buyers, slower price appreciation may mean it is time to buy without fearing rapidly escalating costs. Sellers might have to get used to the idea that the double-digit annual gains are gone for the time being, and they will have to be more realistic in their pricing. The market was moving toward a balanced environment where negotiations and strategic decisions would play a greater role in the sale. 

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A Normalizing Market with Opportunities

The CoreLogic forecast for the U.S. housing market shows a modest growth of 2.4% in 2025, reflecting the balance sought after years of appreciation. This is the more measured expectations driven by real economic factors such as high mortgage rates and increased inventory. Though that would be a slow beginning to the spring buying season, strong momentum may follow later in the year.

As the market normalizes, buyers and sellers alike are able to move through these changes with success. Buyers may benefit from patience and careful planning for the longer term, while for sellers, realistic pricing strategies are key to successful transactions. Looking ahead, 2026 might just be the year when the market gets renewed vibrancy if mortgage rates decline and pave the way for increased activity. Until then, the housing market in 2025 remains a landscape of cautious optimism and strategic decision-making.

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