Are home prices going up or down in 2025? Should you buy now or wait?

As a realtor, I hear these questions daily. Here’s what top experts predict for home prices in 2025 and 2026 and exactly what it means for your decision.

The Bottom Line: What’s Really Happening

Home prices will keep rising, but slowly, expect 2-4% growth in 2025.

This isn’t the explosive 20% gains of pandemic years. It’s a return to normal, balanced market conditions where smart buyers and sellers can both win.

What Top Experts Are Predicting for 2025-2026

Here are the forecasts from the most credible sources tracking the housing market:

Consensus: Most experts predict 2-4% average home price growth for 2025, with similar or slightly slower growth in 2026.

Three Reasons Behind These Forecasts

1. Mortgage Rates Are Dropping

Rates expected to fall to around 6.2% by end of 2026 (Fannie Mae).

What this means: More buyers can afford homes, refinancing becomes possible, and monthly payments become more manageable than during 7%+ rate periods.

2. More Homes Are For Sale

After years of inventory shortages, more homes are hitting the market.

Impact on Philadelphia: More choices in neighborhoods like South Philly, Fishtown, and Delaware County. Less pressure for bidding wars. More negotiating power for buyers.

3. Affordability Is Still Challenging

Despite slower growth, buying a home remains expensive compared to just a few years ago.

The reality: Prices are still much higher than 2019, wages haven’t caught up, and down payments remain a hurdle for many first-time buyers.

What These Forecasts Mean for Your Decision

For Philadelphia Homebuyers

  • Focus on personal readiness, not perfect timing.
  • Good reasons to buy: Life stage needs, renting costs approaching ownership costs, found the right property
  • Bad reasons to buy: Fear of missing out, trying to time the market perfectly, expecting quick profits

For Philadelphia Home Sellers

  • Understand your local market matters more than national trends.
  • Get a professional market analysis for your specific situation.

Key Takeaways for 2025-2026

  • Home prices rising 2-4% annually – modest but consistent growth
  • Mortgage rates declining to approximately 6-6.5% by 2026
  • More inventory available creating better buyer conditions
  • Philadelphia market stable with neighborhood variations
  • Personal readiness beats market timing for most buyers

Want personalized insights on how 2025-2026 forecasts affect your specific Philadelphia neighborhood? Let’s discuss your goals and create a winning strategy. Your trusted Philadelphia realtor, helping you navigate the market with confidence and data-driven insights.