Mid-Year Housing Forecast: 2025 Trends You Need to Watch

As we step into the second half of 2025, the U.S. housing market is signaling a clear trend: stabilization, not collapse. National experts agree that while the boom of 2021 has cooled, there are new opportunities on both sides of the transaction. Buyers are gaining leverage, and sellers are adjusting expectations—making this a transitional but promising moment in real estate.

What the Experts Are Saying

Realtor.com projects that existing-home sales will finish around 4 million, the slowest pace in decades. Home price growth has been trimmed to about 2.5% for the year. However, there’s a silver lining: mortgage rates are expected to ease to 6.4% by year-end.

Zillow forecasts a similar sales volume at 4.16 million, with inventory climbing nearly 17% year-over-year. Unlike Realtor.com, Zillow expects home values to dip about 2%, giving buyers more bargaining power.

Moody’s Analytics emphasizes the bigger picture: the U.S. still faces a serious housing shortage. Millions of homes are needed to meet demand—a major reason prices remain relatively stable despite cooling sales, according to this Wall Street Journal analysis.

What It Means for Buyers and Sellers

For buyers, conditions are improving. Active listings are up 30% nationwide (source), bidding wars have decreased, and mortgage rates are inching downward. That said, monthly payments remain high compared to pre-pandemic levels—so affordability is still a hurdle. Freddie Mac continues tracking rates weekly for deeper insight.

For sellers, pricing strategy is key. Homes are still appreciating—just more slowly. Overpricing can lead to longer time on the market and price reductions. In fact, 1 in 5 active listings this summer has already seen a price cut (Realtor.com report).

Northern Virginia: Local Trends to Watch

In Northern Virginia, we’re seeing national patterns reflected locally—but with unique regional dynamics. Inventory is rising across outer suburbs like Prince William County, Loudoun County, and Fairfax County, giving buyers more choice. Meanwhile, high-demand areas like Arlington and McLean remain competitive and hold their value.

Prices have mostly flattened compared to early 2024, and homes are sitting longer. Negotiation is back on the table. In many cases, sellers are offering closing cost incentives or other perks to get deals across the finish line.

Looking Ahead

The rest of 2025 will reward those who stay informed and act strategically. Whether you’re looking to take advantage of increased inventory or considering selling before more listings hit the market, timing and local expertise are essential.