What I Got Right (and Wrong) About the 2025 Market
Each month, I aim to give you everything you need to know about real estate in one original, no-fluff article—angles and insights you won’t find on Google or in the Wall Street Journal. Something you can read, make sense of, and maybe even share with your network.
Now, I get it: most people (like you) aren’t moving this year… or next… or maybe not for another 5–10 years. So it’s fair to ask:
Why should I care about real estate if I’m not planning to move?
Here’s the simple answer:
The housing market—locally and nationally—is one of the clearest reflections of the broader economy. Home sales, prices, and buyer activity track closely with key trends like job growth, savings rates, consumer confidence, and even the stock market. It’s hard to ignore something that impacts so much.
And now that we’ve officially crossed the halfway mark of 2025, it’s a perfect time to revisit the “5 bold predictions” I made back in January—to see what’s holding up, what’s changed, and most importantly, what it all means for the road ahead.
January Prediction:
1. Pent-Up Demand Will Jump Back Into the Market
Home sales have been stuck at 1995 levels for two years—even though the U.S. population has grown by 70 million people since then. That’s a lot of would-be buyers sitting on the sidelines, and I predicted we’d finally see them jump back in.
The result: Ehh… wait and see.
Home sales rose slightly in May to an annual pace of 4.03 million—up 0.8% from April, but still 0.7% lower than the same time last year. So, the first half of 2025 hasn’t brought this prediction to life… yet. But I wouldn’t rule out a stronger back half to make up ground.
January Prediction:
2. Interest Rates Will Finally Ease
This was one of my safer bets: lower inflation, cooling job growth, and three rate cuts in Q4 of 2024 pointed to a softening in mortgage rates.
The result: Yes—but just barely.
From January to June, the average 30-year fixed rate dropped from ~6.85% to ~6.77%—a modest 8 bps decline. Not exactly a game-changer, but trending in the right direction.
January Prediction:
3. Home Prices Will Rise
With lower rates (even slightly), I expected more demand—and in turn, upward price pressure.
The result: Yes—in most markets.
The Case-Shiller Index (a really solid resource to track national home values) rose from 323.6 in January to 329.6 in April, a 1.8% increase. But annual price growth has cooled—slowing from 4.1% to 2.7%—which could signal the market is easing off the gas… not reversing, but maybe just coasting.
January Prediction:
4. Total Cost of Ownership Will Create Pressure
I predicted that rising insurance premiums—driven by more frequent natural disasters and aging infrastructure—plus a growing population of retirees on fixed incomes would start to impact affordability in real terms.
The result: Yes.
In the first half of 2025 alone, homeowners’ insurance premiums rose between 17–21%. Multifamily insurance saw an even steeper spike—up nearly 45% year-over-year (Reuters).
Total cost of ownership—meaning everything beyond just price and interest rate—is now a real factor buyers are weighing more heavily.
January Prediction:
5. Renting Will Gain Even More Traction
I pointed out that with home prices climbing, renting had become the more affordable option—especially for those under 35 still building savings. For many of my would-be first-time buyers, the path to ownership has grown increasingly complex as both prices and rates remain elevated.
The result: Yes.
As of March, single-family rents rose 2.8% year-over-year (S&P Global), with suburban areas seeing even crazier growth—up to 18% compared to just 8% in the cities.
It probably dovetails with my point about those typical suburban buyers in their 30s with 1.2 kids: homeownership for some—at these rates and prices—has become unattainable. So… renting it is.
So, where does that leave us heading into the second half of the year?
I’ll keep it simple—here are two predictions I feel pretty confident about:
1. The fall selling season will be the busiest we’ve seen since 2021.
Rates are down just enough, inventory is up just enough, and everyone who’s been “waiting for better timing” might finally realize… this is it. I expect a big push from September through November—especially from serious buyers and sellers who sat out the spring.
2. Cash buyers and investors are about to reappear in a big way.
Between stubborn sellers and a cooling buyer pool, more deals will come down to speed and certainty. That’s where cash wins. I’m already seeing investors and cash-ready buyers get active—and I think that trend’s just getting started.
As we’ve seen, this market isn’t easy to make sense of right now. So if you’re thinking about making a move—or even just have questions—it’s always best we talk through the specifics. Timing, strategy, and outcome all matter, and the right plan can make all the difference.
