2025 is here, and so are some predictions for what this new year will bring for the housing market. The last few years have brought high prices that have made it difficult for those looking to buy. Will 2025 remain the same? Here are a few predictions about the future of real estate in this new year.

Prices Might Remain High

Housing prices are expected to rise between 2% and 4% in 2025. Experts predict that there will still not be enough inventory to meet demand, keeping costs high. Additionally, some sources predict mortgage rates will stay in the upper 6% range this year, making it difficult for those looking to buy. However, others predict that they will fall into the lower 6% range—possibly close to 5%.

More Homes Will Be Sold Than in 2024

While costs may still be high in 2025, experts are still predicting that more houses will be sold this year than last. Realtor.com predicts the number of homes listed will increase by 11.7% this year. If interest rates decline, we will likely see even more sales than currently expected.

It Will Be a Renter’s Market

With many people still struggling to afford the costs of a first home, many people may opt to continue renting in 2025. More rental housing may become available along with more amenities for those renting. People may also consider renting out parts of their homes or posting them on short-term rental sites, like Airbnb and VRBO.

Smaller Houses May Become More Common

Large houses have been the trend in the U.S. in recent years. However, it’s predicted that smaller homes will start to become popular in 2025, due to buyers looking for homes that are more affordable or sustainable. In fact, according to Zillow, homes that listed the word “cozy” increased by 35% in 2024. This is great news for those looking to sell their cozy vacation home.

Whatever 2025 has in store for you and your Northwoods home, we are here to help. Contact us today if you’ve been considering selling your property or if you’re looking for the perfect Northern Wisconsin getaway. We’re ready to partner with you whenever the time is right to buy or sell.