Will the Housing Market Crash in 2025? Here’s What the Latest Data Says

Introduction: What the Headlines Aren’t Telling You

With articles like “When Will the Housing Market Crash Again?” appearing across major media outlets, it’s no surprise that both buyers and sellers are feeling uncertain. However, the data reveals a very different reality. This post examines what’s actually happening in the housing market today by reviewing home prices, inventory, mortgage interest rates, and expert predictions for 2025.

Home Prices Are Still Rising, Just More Slowly

As of March 2025, the median U.S. home sale price is $431,078. That’s a 1.5 percent increase from the previous month and a 2.5 percent increase year over year. These figures indicate that while home prices are no longer soaring as they were during the peak of the pandemic housing boom, they are still trending upward.

The rise is slower, but it's steady. While affordability remains a challenge, particularly for first-time buyers, the idea that home prices are collapsing simply isn’t supported by the data.

Buyers and Sellers Are in a Stalemate

Home sales have declined 2.9 percent year over year, which is not surprising. High mortgage rates and high home prices have created a situation where sellers are hesitant to reduce prices and buyers are unwilling to overpay. This dynamic has resulted in a slowdown in overall market activity.

This stalemate is the main reason the market feels frozen. It’s not driven by a lack of interest but by a mutual reluctance to move under current conditions.

Inventory Is Up, But Still Historically Low

There are currently 1.8 million homes for sale in the United States. That represents a 15 percent year-over-year increase in housing inventory. However, this is still below pre-pandemic levels. For context, there were 2.2 million homes for sale in March 2019.

While headlines may suggest that inventory is rising sharply, the numbers show we are still in a historically low supply environment. That limited inventory continues to place a floor under home prices.

Mortgage Interest Rates Remain High, With Limited Relief in Sight

The average interest rate on a 30-year fixed mortgage is currently 6.9 percent. The Federal Reserve has signaled that it expects to cut interest rates twice in 2025, by 0.25 percent each time, for a total reduction of 0.5 percent.

While this could bring some relief, it will not be enough to drive mortgage rates back to the ultra-low levels seen in 2020 or 2021. The reality is that rates in the 6 percent range may remain the norm for the foreseeable future.

What the Big Forecasts Say About 2025 Home Prices

Here is what major institutions are predicting for home price growth in 2025:

SourceForecasted Price GrowthNational Association of Realtors2.0%Zillow2.6%JPMorgan Chase3.0%HousingWire3.5%Fannie Mae3.8%CoreLogic4.1%

Most forecasts expect home prices to appreciate in the range of 2 to 4 percent. This is more in line with historical norms and suggests continued, though more moderate, growth.

Practical Advice for Buyers

Trying to time the market for a potential crash is rarely effective. Even if a crash were to start today, historical precedent shows that it could take years to fully play out. The last housing crash took five years from peak to bottom.

Instead, buyers should focus on value. Take time to research and shop around. Be patient and negotiate wisely. If you find a home that fits your needs and budget, consider purchasing it, and plan to refinance later if rates decline.

Final Thoughts

There is no evidence of an imminent housing market crash. The data shows a cooling market, not a collapsing one. Home prices are still increasing, albeit more slowly. Inventory remains low, and interest rates are high, creating a market that’s more balanced than bullish or bearish.