Welcome, 2025 — we have been anxiously awaiting your arrival! We know business never stops, but ushering in a new year brings a new sense of excitement and anticipation. So we thought it would be a good opportunity to gather together what some of our industry experts say 2025 could bring, and the economic conditions behind these projections.

30-year interest rates won’t change much

In November of 2024, the Mortgage Bankers Association revisited its forecast, predicting that 30-year mortgage rates will start off 2025 in the high 6% to low 7% range, gradually trending slightly lower to end the year in the mid-6% range. This mirrors NAR’s chief economist Lawrence Yun’s prediction that rates will hover between 6.5% and 7% throughout 2025.

Home sales will rise

We know real estate is local — hyper-local, even — so predicting what home sales will look like in any specific market can be very tricky. The overall consensus is that home sales will rise between 5% and 9%, with the largest gains in new home sales (new construction), which is predicted to be up 8% to 11%.

Major economic indicators to keep an eye on

We know that economic factors like people’s jobs, wages and cost of goods influence economic policymaking and consumer confidence. According to experts, job growth will continue, but at its slowest pace in the past 3 years, while wages are predicted to rise 3%, down from 4% in 2024. Core inflation, which started off 2024 around 5.5%, is expected to end around 2.8%. 2025 predictions show that inflation will dip slightly further, ending the year around 2.5%. The wildcard in all of this is how a new administration and policy will impact these predictions.

So while we have dusted off our crystal ball to see if we see all the same things industry experts are predicting, the truth is no one can control any of these predictions. These are all things that happen regardless of what we do or don’t do — so while it’s important to have context for what will be happening, our results will depend on what WE do to engage with our sphere. Key Mortgage and our loan officers are ready to ride beside you through 2025 being the support system you can rely on to help you achieve your goals. We can’t wait to get started!