What’s Next for the 2025 Housing Market? Here’s What Experts Predict

The 2025 housing market forecast highlights home prices, mortgage rates, and sales trends to help buyers and sellers navigate the second half of the year.

Can you believe we’re already halfway through 2025?

As we head into the second half of the year, a lot of buyers and sellers are asking the same thing: What’s next for the housing market?

While no forecast is guaranteed, economists from Fannie Mae, Zillow, NAR, MBA, and others have released updated projections on everything from home prices and mortgage rates to sales activity and market recovery.

In this post, I’ve rounded up the key takeaways from their mid-year outlooks—and added a breakdown of what they could mean for our local market here in Hampton Roads and Virginia Beach.

Home Price Forecasts

Most housing economists agree: prices will rise, but not by much. And depending on where you live, they could even decline.

Home price forecasts for 2025:

• Cotality: +4.3% from April 2025 to April 2026
• Fannie Mae: +4.1% in 2025
• Home Price Expectations Survey (HPES): +3.3%
• NAR: +3% in 2025, +4% in 2026
• MBA: +1.3% in 2025, <1% in 2026
• Zillow: -1.4%, an improvement from its earlier prediction of -1.9%

Notably, some overheated markets like Florida, Texas, Hawaii, and Washington D.C. are seeing declines.

Meanwhile, more affordable areas in the Midwest and Northeast are holding strong, especially suburbs near expensive cities.

Market Trends: Hampton Roads & Virginia Beach

Locally, both Hampton Roads and Virginia Beach continue to see home price appreciation, though at a more moderate pace than in previous years.

• In Virginia Beach, the median sale price reached $376,500 in December 2024, up 4.6% year-over-year, with a price per square foot of $230 (up 6.7%). Zillow projects a further 3% increase in home values by the end of 2025, signaling continued—if modest—growth.
• In Hampton Roads, the average sold price in April 2025 was $411,585, up from $386,929 in April 2024. This represents a year-over-year increase of about 6.4%.
• Hampton Roads Center specifically saw a median sale price of $340,000 in May 2025, up 14.3% from the previous year, though the price per square foot dipped slightly.

Local Market Insights

• Virginia Beach remains a very competitive market, with homes selling quickly and often above list price. Neighborhoods like Alanton, Bay Colony, and Croatan continue to command higher price points, while areas like Chic’s Beach and Christopher Farms offer more affordable options and strong demand from families and young professionals.
• Hampton Roads as a whole is seeing steady demand, with homes selling in an average of 33 days. The higher price points are performing well in established neighborhoods, while more affordable segments are attracting first-time buyers and military families.
• Inventory remains tight, which is helping to sustain upward pressure on prices even as the pace of appreciation moderates.

Existing Home Sales Outlook

Sales activity is expected to grow this year, but recovery will be gradual.

Forecasts for existing home sales in 2025:

• NAR: +6% (with an 11% gain expected in 2026)
• Fannie Mae: +4.4% (4.24 million home sales)
• MBA: 4.3 million home sales
• Zillow: +1.4% (4.12 million home sales)

Improving inventory and gradual rate relief are creating more movement in many markets.

Local Sales Trends

• Virginia Beach: Home sales surged 18% year-over-year in December 2024, with 452 homes sold. This uptick shows that buyer demand remains strong despite higher mortgage rates, and homes are still moving quickly.
• Hampton Roads: In April 2025, 2,277 homes sold, just slightly below the 2,346 sold in April 2024, indicating a stable market. Days on market held steady at 33 days, suggesting that well-priced homes are still attracting buyers efficiently.
• In Hampton Roads Center, homes are going pending in about 22 days, with especially desirable properties selling even faster—sometimes in as little as 14 days and above list price.

Mortgage Rate Predictions

If you're waiting for mortgage rates to drop below 5%, you’ll likely be waiting a while. But slow, steady improvement is expected.

2025 mortgage rate forecasts:

• MBA: 6.6% average in Q4 2025; down to 6.3% by end of 2026
• NAR: 6.4% in late 2025; 6.1% in 2026
• Fannie Mae: 6.1% by year-end; 5.8% in 2026

Lawrence Yun, NAR’s Chief Economist, calls mortgage rates the “magic bullet” for unlocking market momentum. Lower rates could encourage more buyers, especially first-timers, back into the market.

Local Buyer Response

• Buyers in Hampton Roads and Virginia Beach are adapting to higher rates by adjusting their budgets and, in some cases, expanding their search to more affordable neighborhoods. While some buyers are waiting for rates to drop, many are moving forward, motivated by rising rents and the desire to lock in current prices before further appreciation.
• The competitive nature of the market means that well-prepared buyers—those with strong pre-approvals and realistic expectations—are still able to secure homes, especially in sought-after neighborhoods.

What This Means for You

Here’s the bottom line for buyers, sellers, and homeowners in today’s market:

• Recovery is happening, but slowly. Most forecasts point to modest gains in both home prices and sales volume through the rest of 2025, with more growth expected in 2026.
• Mortgage rates are likely to stay above 6%, which means realistic budgeting will remain essential for anyone looking to purchase.
• Local trends in Hampton Roads and Virginia Beach remain positive: prices are rising, homes are selling quickly, and demand is steady—especially in family-friendly and coastal neighborhoods.

But it’s important to remember that national trends only tell part of the story. Every local market behaves differently, and what’s happening in one region may not apply in another. Even different price points within the same market can experience completely different dynamics!

If you're curious about how these trends are playing out in Hampton Roads or Virginia Beach, let’s talk. I'm happy to break down what’s happening and how it could impact your plans to buy or sell.

Megan Luker is a licensed Realtor in the Commonwealth of VA at ΓEA⅃ Broker, LLC. 757 703 1590 (direct), 855 450 0442 (office), 1765 Greensboro Station Place, 900 McLean, VA 22102

📱: text/call me at 757-703-1590
📧: megan@lukerativegroup.com