Housing Market Trends For Second Quarter 2025

There’s a change in the air, and it’s not just warmer temperatures or the sweet scent of springtime. The second quarter is a time when homebuyers traditionally come out of hibernation, more residences get listed for sale and industry movers and shakers get moving and shaking. But while we are enjoying the blooming flowers, not everything is perfectly rosy in the 2025 housing market.

Case in point: Home prices continue to escalate. Per data from the National Association of Realtors (NAR), the median existing home sale price in February 2025 increased 3.8 percent year-over-year to $398,400, marking an incredible 20 consecutive months of year-over-year price jumps.

The good news for shoppers is that the supply of available housing also increased, up a solid 17 percent from one year prior. Additionally, mortgage rates are the lowest they’ve been since last October, with the 30-year fixed-rate home loan averaging 6.67 percent as of early April.

So how will the next three months shake out? Will prospects improve for homebuyers and sellers? Here’s what industry experts have to say.

Q2 2025 housing market trends: What to expect

Welcome to what is traditionally the most lively time of the year for the housing market. Many families with school-aged kids are motivated to shop in the spring, so they can move and settle in before school begins in the fall.

The market usually sees plenty of activity between April and June, with around 29 percent of yearly home sales occurring over these three months, says NAR senior economist and director of real estate research Nadia Evangelou. “I expect the second quarter of 2025 to remain strong, with market activity picking up due to improved inventory levels, steady wage growth and relatively lower mortgage rates compared to last year’s peaks,” she says. “This season should be more active than last year, but the pace of growth will vary by location.”

According to Rob Barber, CEO of the real estate data firm ATTOM, national median home prices have risen 5 percent to 11 percent in the second quarter over the past decade, making it the strongest quarter of the year for price gains. “Federal data also confirms that housing inventory consistently rises each spring as sellers list their homes to meet buyer demand,” Barber says. “This increased competition among buyers helps push prices higher.”

However, the economy in 2025 is shaping up to have unique challenges, with investment markets volatile and talk of a possible recession. “These factors could drive buyers to act quickly out of concern for future economic conditions, pushing prices even higher,” he says. “On the other hand, financial uncertainty may cause some potential purchasers to hold off, tempering demand and moderating price increases.”

While housing activity this spring will likely increase relative to previous quarters, “it still won’t be enough to blow anybody’s hair back,” says Greg McBride, chief financial analyst for Bankrate. “Affordability issues from high home prices and high mortgage rates remain the major impediments.”

Q2 mortgage rate projections

The experts foresee home-financing rates hewing close to current levels in the months ahead.

“The 30-year mortgage rate should average 6.7 percent in the second quarter, little changed from where it was at the end of the first quarter,” says Molly Boesel, senior principal economist for Cotality. “While rising unemployment may drive rates lower, economic uncertainty and pressure on inflation will most likely keep rates high.”

McBride believes any rate pullback is likely to be modest over the next three months — he expects 30-year fixed rates to remain in the mid-to-high 6 percent range. “If rates decline because the economy is weakening, that will not spur more home sale transactions,” he says. “But if rates decline because inflation pressures ease and the economy keeps chugging along, that would spur more transactions.”

Where home prices are heading

Housing market pros are in consensus here: Don’t anticipate the price tag on homes to drop anytime soon.

“Prices will continue to rise this quarter, driven by strong demand and persistent supply constraints,” Evangelou says. “But affordability challenges may temper the pace of appreciation to a more moderate but steady increase in home values.”

Boesel predicts that prices will tick up by about 1.5 percent this quarter. “Home prices should continue to rise on the national level,” she says. “But some markets will remain weak, given for-sale inventory buildup and increases in non-mortgage costs, like taxes and insurance.”

Kenon Chen, executive VP of strategy and growth at Clear Capital, expects home price growth to remain fairly flat through June, with rising supply and increasing demand counteracting each other: “Our most recent data show a quarter-over-quarter home price decline of 0.2 percent as of February, while year-over-year appreciation is up 4.7 percent,” he says. “Overall, home affordability remains a challenge, with mortgage rates being triple what they were a few years ago.”

Housing inventory predictions for Q2

Fortunately, housing supply is on the rise, and it’s likely to continue increasing, albeit modestly, through Q2. This is good news for hopeful buyers: “In markets where inventory has improved, buyers may have slightly more negotiating power right now compared to previous years,” says Evangelou.

However, rising inventory levels may be a bit misleading, according to McBride. “Inventory is improving from very low levels, but it is happening because homes are taking longer to sell — it isn’t because there has been an influx of sellers,” he says. “Inventory will remain tight in the price range of many first-time homebuyers.”

Strategies for homebuyers and sellers

If you’re a hopeful homebuyer and your finances and timing align, now might be the time to pull the trigger. “Buying before the summer competition heats up has some advantages — plus, a financed purchase now can always be refinanced later,” says Chen.

But proceed with caution if higher prices stretch your resources. “When affordability is strained, it often leads buyers to reach to the very limit or beyond what they can comfortably afford,” McBride says. “But leave yourself some breathing room: Your income may not always increase or may not increase as fast as you hope, overtime can get cut, unplanned expenses can arise. Leave some buffer so something like that doesn’t lead to a crisis if it occurs.”

Sellers, meanwhile, should be prepared to pivot accordingly. “The market is shifting, with more negotiation options available to buyers lately,” Chen says. “We have also seen more pricing changes from sellers indicating they need to right-size the listing price to fit current demand.”

Boesel agrees, advising sellers to carefully watch economic conditions and be prepared to accept a below-asking price, especially as mounting job losses possibly impact the amount shoppers are willing to pay.

Lastly, if your listed home languishes on the market, consider sweetening the deal with a seller concession. For example, “would-be buyers in need of mortgage financing are receptive to seller-funded temporary rate buydowns,” McBride says. “It is an incentive to offer that doesn’t involve cutting the price of the home.”