5 Trends and Predictions for the U.S. Housing Market, According to a Real Estate Pro

After toasting to the beginning of 2025, is cheersing to a new home purchase coming soon? This could be the year for many buyers and sellers, according to Lindsey Harn, a residential real estate agent and owner of Lindsey Harn group in San Luis Obispo, California.

Harn’s overarching prediction? Buyers and sellers are going to start making moves in the market, especially if they’re in a state like California, where real estate appreciates at a higher rate.

“We anticipate more homeowners making the move as they adjust to the higher interest rates,” she says. “But like 2024, if you are holding onto a 2.5 to 3 percent interest rate, the new home must be amazing in order to make the move.” 

Below, see Harn’s full trend forecasting report.

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1. Look Out for More ‘Sold’ Signs—with a Slow Start in the New Year.

“We expect 2025 to exceed 2024 in terms of the number of transactions, at least here in California,” Harn says. “Real estate is one of the best hedges against inflation, and we anticipate people will continue to see the value of owning property.”

If the price is right, you’ll also want to consider the interest rates, which Harn says will take more time because of the upcoming inauguration.

“We are seeing rates improve, but I think it will take at least until Q1 to see what the new administration’s plans are going to be when it comes to interest rates, the Federal Reserve System, and plans for stimulating the economy,” she says.

2. People Will Continue Getting Creative with Their Spaces.

Homeowning is expensive, and because of that, many are getting creative by designing co-living and co-working spaces. For instance, people are benefitting from building out a rental space on their property, so they can live in their home with roommates who pay rent.

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3. Make Way for More Tiny Homes.

Harn has also noticed a push toward “ADU simple living,” especially in the wake of the pandemic. “While we saw the peak of square footage in the pandemic, we are now seeing a decrease in square footage people need,” she says.

4. Enhancing Your Exterior Design.

“People want to enjoy the exterior of their home as an extension of the interior,” Harn says, adding that her clients are looking for bonus features such as saunas, hot tubs, cold plunges, outdoor kitchens or pizza ovens, and more.

5. Continuing to Prioritize Sustainability and Climate Resilience.

One trend with staying power is homes with more energy efficiency, particularly with passive cooling and heating. “With more and more wealth transferring to the younger generations, we are going to continue seeing this as a popular trend,” Harn says.