The top market forecasts for the rest of 2025

The big picture

In today’s edition, we give you a broad look at the current state of the housing market from many sides – home sales, investor activity, and luxury prices.

Each report is chock-full of data. We encourage you to analyze it carefully, because it not only can tell us a lot about where the market sits currently, but where it might be headed. 

As usual, we’ll give you our takes on what that means for you and your business.

On that note, in today’s Foundation Plans, we are heading into our latest series on sellers and seller agents, where we give our best tips on how to move homes fast and keep listings from going stale. 

With that, we don’t want to let this intro go stale… so let’s get moving into today’s Blueprint!

- James and David

Forecasts for the second half of 2025

As we head into the second half of the year, many of the leading industry firms have published their forecasts. Here’s a summary of what they project will happen by the end of the year regarding home prices, existing home sales, mortgage rates, and mortgage originations. 

Home Prices

• Cotality: +4.3%

• Fannie Mae: +4.1%

• NAR: +3.0%

• MBA: +1.3%

• Redfin: -1.0%

• Zillow: -1.4%

Existing Home Sale Totals

• NAR:  4.30 million

• MBA: 4.26 million

• Fannie Mae: 4.23 million

• Zillow: 4.12 million

Mortgage Rates

• MBA: 6.6%

• NAR: 6.4%

• Fannie Mae: 6.1%

Total Mortgage Originations

• Fannie Mae: $1.99 trillion

• MBA: $2.07 trillion

Our take

The second half of 2025 is shaping up to be okay, but not spectacular. The worst may be behind us, although the recovery will be gradual. As you can see, most forecasters expect modest home price gains, a slight uptick in sales activity, and mortgage rates that hover in the mid-6% range. That means buyers and sellers won’t be rushing into the market in droves, but they will move when the price is right. For agents, this is a market where brokering skills matter more than ever. Pricing strategy, negotiation, and setting the right expectations with clients will make the difference between listings that linger and deals that close.

The state of investors in the housing market

13% of homes purchased in 2024 were purchased by an investor, slightly down from the peak of 13.3% in 2022, according to Realtor.com’s latest report on residential investment activity. Although the number of total home purchases dropped year-over-year, slightly more homes were bought by investors. 

Here are the other key takeaways from the 2024 data:

• 10.8% of home sellers were investors, marking the highest share on record 

• Small investors accounted for a record-high 59.2% of investor purchases, while large investor activity fell to 21.7%, the lowest share since 2007.

• Small investors purchased 361,900 homes (+3.7% YoY), while large investors purchased 132,500 homes (–8.7% YoY), the lowest since 2018.

• Small investor all-cash purchases fell to 62%, the lowest since 2008, and large investor all-cash purchases dropped to 68.9%, the lowest since 2015.

• The states with the highest investor-led activity were all in the Midwest:

  • Missouri: 21.2%

  • Oklahoma: 18.7%

  • Kansas: 18.4%.

Our take

The investor landscape is shifting, and that creates opportunity. As large firms step back, small-scale investors are taking the lead, especially in affordable markets with strong rental demand. Midwestern metros like St. Louis, Oklahoma City, and Memphis are seeing the most activity. For agents, this presents a dual opportunity–they can market listings as income-generating investments for first-time or small investors, and they can help buyers move quickly in areas where competition from investors is picking up. In this evolving market, understanding where and how investors are moving gives agents a clear edge.

Major metros where you can buy luxury homes for less than $1 million

The number of major metros where you can buy a luxury home for less than $1 million has dropped sharply, from 30 in 2020 to just seven today, according to Redfin’s latest update on the luxury market. Redfin defines “luxury” as homes in the top 5% of estimated values within a metro area. 

Among the remaining affordable markets, Detroit tops the list, with a median luxury home price of $753,851, 44.1% lower than the national median for luxury homes. At the other end of the spectrum, San Francisco remains the most expensive, with a median luxury home price north of $6 million. 

Price growth also varied widely: West Palm Beach saw the largest increase in luxury home values over the past decade (+207.6%), while New York City saw the smallest (+33.4%).

Here are the 7 major metros where you can still buy a luxury home below $1 million, according to the median luxury sale price in 2025:

1. Detroit, MI: $753,851

2. Cleveland, OH: $757,046

3. Pittsburgh: PA: $846,715

4. Indianapolis, IN: $914,276 

5. St. Louis, MO: $914,453 

6. Cincinnati, OH: $931,145

7. San Antonio, TX: $957,854

Our take

Luxury is becoming increasingly exclusive, but like most areas of real estate, the situation differs by market. Detroit, Cleveland, and Pittsburgh still offer luxury-level homes at prices that would barely get you a starter condo in San Francisco. These metros are ideal for move-up buyers, out-of-state relocators, and even investors seeking high-end features at entry-level prices. In places like West Palm Beach, luxury values have more than tripled in a decade. In New York, they’ve barely moved. That gap creates space for targeted messaging. What buyers perceive as “luxury” in your market may not match national trends. That’s your edge. Remember: agents who understand the local definition of value are the ones who win.

Schematics

The news that just missed the cut

• What being on top of your pipeline looks like 

• Watch out – this is the new crypto scam targeting agents

• Use this open house plan to generate more leads

• Architectural home styles that command the most dollars

• Gorgeous Fisher Island penthouse lists for $50 million

Foundation Plans

Advice from James and David to win the day

We just wrapped our four-part series on how buyers and buyer agents can maximize their leverage in today’s market. Now, we’re shifting focus to sellers and seller agents. In this new series, we’ll share strategies for listing agents to move homes before they go stale. Today, we’ll cover proactive tips to help your listings stand out and sell fast. 

Prepare your clients first – Most sellers will still be living in the home, and that can pose challenges. Help them understand that the house needs to feel like a model home, not a lived-in one. Daily clutter, personal touches, and messes must go. Your job is to present the home in its best light, and their job is to support you in doing that.

Get the home pre-inspected – A pre-inspection lets you fix deal-breaking issues before they surface. Focus on HVAC, plumbing, electrical, and safety concerns. Swap out furnace filters, wipe down the water heater, and check for mold in basements or crawl spaces. When showings begin, provide a copy of the inspection and receipts for recent repairs. Mention it in agent-to-agent remarks in the MLS — it builds trust and shows the home is well cared for.

Perfect the first impression – Buyers make emotional decisions at two key moments: from the curb and in the foyer. Make sure both shine. Upgrade landscaping, repaint the front door, and add a fresh doormat or potted plants. Inside, the entry should feel open and welcoming — no clutter, no coat trees, no oversized furniture. Nailing this first impression can add thousands to your seller’s bottom line. Truly, we can’t emphasize this enough. Making a good and lasting first impression is crucial.

Preview the competition – The day before you launch your new listing, check out your competition one more time. Make sure your pricing is still accurate, and what the potential buyer is considering. Your price has to make sense. In some cases, you may want to take your seller client along for these showings so you’re on the same page regarding pricing. Are other listings (especially new construction homes) offering seller incentives? You may need to meet or beat them depending on what you’re up against.

Stay tuned for Part Two in our series, but in the meantime, message us. We’d love to hear what you think of our advice and what questions or concerns you might have.

Just in Case

Keep the latest industry data in your back pocket with today’s mortgage rates:

“The only person you are destined to become is the person you decide to be.” – Ralph Waldo Emerson

Taking ownership of your life is demanding, but it's also liberating. Instead of being pushed around by circumstances you can't control, you get to chart your own course. Embrace the responsibility of building the life you want. Decide to become the person you want to be.

- James and David