It’s that time of year – prediction season – and everyone’s wondering what the real estate market has in store for us in 2025. Here’s a breakdown of what experts are saying the next year will bring, in CT and beyond:
1. Prices will continue to rise
Redfin’s economists predict continued price growth nationwide, at around 4%. Median home prices in CT rose 8% in 2024, fueled especially by Fairfield & New Haven counties.
The bottom line is that the supply-demand imbalance will still be the defining feature of the market. With the economy expected to stay strong in the new year, along with CT’s desirable suburban proximity to New York City, demand will likely keep home values rising in the state.
The multifamily construction boom from the pandemic will bring more rental units on the market in 2025, though. Renting may become increasingly affordable compared to homeownership.
2. Mortgage rates probably won’t fall, by much
If the economy stays strong – and investors have shown that they expect that it will – the Fed may limit cuts to the Federal Funds Rate, keeping mortgage rates up.
The incoming administration’s proposed tariffs may contribute to rising prices, which could lead the Fed to increase the interest rate. On the other hand, if the DOGE can succeed in reducing the national deficit through spending cuts, it might put downward pressure on the Fed’s rate.
Ultimately, mortgage rates depend on many factors, making their future difficult to predict.
3. More home sales will occur in 2025
With the election in the rearview, and high mortgage rates becoming accepted as somewhat of a new norm, we’re likely to see the number of home sales increase in Connecticut and nationwide.
Homeowners who were waiting out on selling can only wait so long. Plus, life events like relocations, downsizing, or growing families will always happen, regardless of the market, and will prompt many to list their homes regardless.
What are your real estate goals for 2025? Let’s start planning for the new year: Contact Us
