Five major real estate predictions for 2025 that did not happen

Here are five major real estate predictions for 2025 that did not happen — meaning these forecasts were widely discussed before or during the year but ultimately didn’t materialize as expected, based on housing data and expert reviews looking back on 2025. 

1. Existing-home sales would significantly rebound

Prediction: Experts (including the National Association of Realtors) forecasted that existing-home sales would increase by around 9% in 2025 as inventory improved and buyer confidence returned.
What actually happened: Sales remained essentially flat compared with the previous year, well below the predicted jump — buyers were still sidelined because of high mortgage rates and affordability challenges. New Home Source

2. Mortgage rates would fall into the high-5% range

Prediction: Many housing market forecasts assumed that mortgage rates would drop significantly in 2025 — some predicting rates in the high-5% territory.
What actually happened: Mortgage rates never meaningfully broke below 6% and stayed elevated much of the year, frustrating many buyers and dampening market activity. New Home Source

3. Multiple aggressive Fed rate cuts would drastically lower borrowing costs

Prediction: Some forecasters expected several Federal Reserve rate cuts that would quickly translate to much lower mortgage rates, stimulating fresh demand in the housing market.
What actually happened: The Fed made only modest cuts, and those did not significantly reduce mortgage rates, leaving borrowing costs higher and home sales softer than anticipated. New Home Source

4. Home prices would not fall

Prediction: Several analysts said broad home price declines were unlikely in 2025 and that prices would hold steady or modestly rise.
What actually happened: While prices stayed generally elevated in many areas, significant local declines emerged — such as sharp home value drops in markets like Austin and elsewhere — reflecting a more uneven price picture than predicted by many forecasts. Axios

5. Affordability would noticeably improve

Prediction: Some forecasters predicted that affordability would begin to improve in 2025 thanks to declining rates and rising incomes.
What actually happened: High mortgage rates and persistent price levels meant affordability gains were limited; buyers continued to struggle, and many remained priced out or postponed purchases. Inman

Summary Insight

Many 2025 forecasts assumed a noticeable thaw in the housing market with stronger sales growth, lower interest rates, and smoother affordability gains. In reality:

• Sales remained sluggish

• Mortgage rates stayed relatively high

• Home prices proved resilient in some places and dropped in others

• Affordability challenges persisted

Overall, the market showed more moderation and regional variation rather than the broad rebounds that many predictions envisioned.