Will 2025 be a better year to buy a house?

Homebuyers eager to forget this year’s housing market may ring in 2025 with an extra dash of zeal.

A rapid rise in home prices has coincided with stubbornly high mortgage rates, shutting out potential buyers with daunting costs.

A burst of supply could have eased prices, but no such relief was forthcoming. Instead, homeowners have balked at swapping out their current mortgage rates for higher ones, and construction has failed to make up for a long-standing shortage in new homes.

Unfortunately, next year’s housing market will likely bring more of the same, experts told ABC News.

Home prices may rise at a slower pace, offering a glimmer of hope as high mortgage rates fall slightly but continue to weigh on consumer activity, they said.

Still, the market appears locked into a fundamental mismatch of supply and demand set to frustrate buyers, the experts added.

“I don’t see much sunshine in the forecast,” Ken Johnson, chief of real estate at the University of Mississippi, told ABC News. “It’s going to be gloomy and overcast, but it’s not going to be stormy.”

An unusual trend has beguiled buyers: Home prices are soaring, despite a prolonged stretch of high mortgage rates that, in theory, should crimp demand and push down prices.

Market observers who spoke to ABC News said they expect both price increases and mortgage rates to ease in 2025 — but only a smidge.

The average rate for a 30-year fixed mortgage stands at 6.85%, FreddieMac data last week showed. That figure has ticked up slightly since the start of the year, despite a series of interest rate cuts at the Federal Reserve in recent months.

Earlier this month, Fed Chair Jerome Powell said rate cuts may slow over the course of 2025. Such a policy would leave mortgage rates higher for longer, experts said.

Redfin, a Seattle, Washington-based real estate giant, forecasts average 30-year fixed mortgage rates will remain in the high 6% range over the duration of 2025. Online real estate marketplace Zillow says mortgage rates will fall, but only moderately.

Alongside persistently high mortgage rates, experts predicted a continued, albeit slower, rise in home prices.

In September, Goldman Sachs predicted a 4.4% rise in home prices in 2025, which would mark a slight decline from the 4.5% rise in 2024.

The persistence of high mortgage rates will put some downward pressure on prices, since demand will soften as many consumers forego expensive loans, experts said, but the high rates will also exacerbate a lack of supply that has kept prices soaring.

Current homeowners will want to remain locked into relatively low mortgage rates. Homebuilding will deliver much-needed supply of new homes, but it will fall well short of the amount required to meet demand, experts said.

“I don’t want to be the bearer of bad news, but it doesn’t feel like prices are going to moderate that much,” Marc Norman, associate dean at the New York University School of Professional Studies and Schack Institute of Real Estate, told ABC News. “If you don’t have a lot on the market, that’s going to put pressure on prices.”

Experts who spoke to ABC News acknowledged that economic forces could defy expectations, leaving the housing market in better or worse shape than anticipated.

Faster-than-expected progress in bringing inflation down to the Fed’s target level could free up the central bank to slash interest rates, which in turn would lower mortgage rates, some experts said. An economic downturn would damage household finances and ease demand, likely leading to a drop in home prices, they added.

If inflation proves more stubborn than expected, however, interest rates may stay high for even longer, experts said, which could put the housing market into an even deeper freeze.

For now, the outlook for 2025 appears clear, Christopher Mayer, a real estate professor at the Columbia University Business School, told ABC News.

“My best guess is that next year is a lot like this year,” Mayer said.