In Episode 197 of the Martini Mortgage Podcast, Certified Mortgage Advisor and Raleigh Mortgage Broker Kevin Martini uncovers the Martini Mortgage Group 2025 Housing Market Forecast, exploring three key areas critical to homeowners and buyers alike: mortgage rates, home sales, and home prices.
Spoiler Alert! One word will define the 2025 real estate market—resilience.
Martini Mortgage Group 2025 Housing Market Forecast
Mortgage Rates: What to Expect
The Federal Reserve initiated its rate-cutting cycle in Q3 2024, setting the stage for potentially lower mortgage rates in 2025. However, it’s important to debunk a common misconception: the Federal Reserve does not directly control mortgage rates. Mortgage rates are shaped in real-time by the bond market, which reacts to current conditions rather than trailing data from the Fed.
Think of it like this: the bond market is a pilot adjusting the plane’s altitude and speed based on what’s ahead—not what’s behind.
In 2025, mortgage rates may temporarily edge higher due to lingering inflation pressures but are forecasted to drop significantly as the year progresses. The Martini Mortgage Group anticipates rates ranging between 7.25% on the high end and 5.75% on the low end.
Why does this matter? Every 1% drop in mortgage rates unlocks purchasing power for an additional 5 million homebuyers. This demand, coupled with a limited housing supply, is expected to create upward pressure on home values.
Home Sales: A Real Estate Market on the Move
The 2025 housing market is projected to see approximately 5.4 million home sales—a notable increase compared to the projected 4.7 million in 2024 and 4.8 million in 2023. This growth is attributed mainly to improving mortgage rates and continued buyer demand.
However, the market faces a significant hurdle: a 4.5 million home shortfall in the U.S. housing inventory. This imbalance will likely maintain a strong seller’s market throughout 2025 and beyond. Here’s the Kevin Martini takeaway:
If you hear the term ‘Seller’s Market,’ don’t let it intimidate you—it’s your signal to act decisively. A seller’s market often presents opportunities for buyers to secure a home before prices rise further.
Home Prices: Slow and Steady Growth
The Home Price Expectation Survey, which aggregates insights from over 100 market experts, is the Martini Mortgage Group’s gold standard for tracking home value trends. For 2025, the survey projects:
- 3.6% home price appreciation for the year.
- Another 3.6% appreciation in 2026.
- Over five years, the most pessimistic scenario anticipates 14.1% cumulative growth, while the most optimistic predicts a staggering 39.9% increase. The median expectation sits at 27.2% growth.
This steady appreciation reflects a healthy, sustainable housing market rather than the volatility seen in prior years. Even the most cautious forecasts show a continued rise in home values, reinforcing real estate as a reliable long-term investment, especially in the Raleigh, NC, area.
Why 2025 is a Unique Opportunity for Raleigh Homebuyers
While every forecast comes with variables, the overarching trends for 2025 are clear: real estate remains a green and growing market. Whether you’re considering purchasing your first home, upgrading, or investing, timing and preparation will be your greatest allies.
Ready to Take the First Step? Let’s Talk.
Have questions about navigating the 2025 housing market or securing the best mortgage strategy? As a Certified Mortgage Advisor and a trusted Raleigh mortgage broker, Kevin Martini is here to help.
Let’s discuss your unique situation confidentially and without judgment. Call Kevin Martini at (919) 238-4934 or tune into the Martini Mortgage Podcast for actionable insights to help you achieve your real estate goals.
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