Halfway through 2025, and the housing market remains in balance—for now. The rapid price gains and frenzied competition of recent years have cooled, but this isn’t a market in retreat. Instead, experts are calling for a steadier second half of the year, marked by moderate price growth and stubbornly stable mortgage rates.

Prices: Cooling, Not Crashing

Some buyers have been waiting for a price drop, but most experts say that’s not on the horizon. The National Association of Home Builders projects 1.5%–2% home price growth for 2025, on average, with only modest dips—around 3.5%—in select markets.

Nationwide, prices are still up 55% over the past five years according to the FHFA, reinforcing housing’s role as a long-term wealth builder. While price appreciation is slowing from pandemic highs, the data points to normalization, not a correction.

Mortgage Rates: Lower, But Not Low

Many buyers are also holding out for a rate drop—but they may be waiting longer than they think. Yahoo Finance and other analysts expect rates to stay in the mid-6% range through year-end. That means buyers waiting for a return to sub-6% may face higher prices when they re-enter the market.

The message from experts: focus on overall affordability and lock in when the payment fits, rather than trying to time the market perfectly.

What This Means for REO Professionals

• Moderating Price Growth Shapes Market Dynamics:
  While rapid appreciation has slowed, steady values mean distressed properties entering the pipeline may carry more equity. That equity can influence workout options, sales strategies, and recovery timelines, shaping how REO professionals engage with assets.
• Regional Exceptions Matter: Some local markets will see softer prices and higher distress—opportunities for those tracking data closely.
• Affordability Will Drive Demand: As buyers get used to mid-6% rates, demand could strengthen for more affordable, distressed, or creatively financed properties.

Bottom Line

The rest of 2025 is shaping up to be a measured market, with balanced conditions in many areas and opportunity in pockets where prices soften or affordability remains a challenge.

For REO professionals, this environment rewards local expertise, adaptability, and readiness to move when conditions align.