Will Home Prices Drop in 2025? Here’s What You Need to Know

With home prices climbing for several years, many buyers are wondering if a crash is finally on the horizon. Social media is full of bold claims and dramatic headlines—but the real data tells a different story.

According to Andrew Harkins, a seasoned mortgage professional at harkinslendingteam.com/home, "There’s a lot of noise out there, but the fundamentals don’t support a crash. In most markets, prices are stabilizing, not collapsing."

Why a Crash Isn’t Likely

Despite affordability challenges and high interest rates, most housing experts—including Freddie Mac—do not expect a crash. Why? It comes down to basic economics: supply and demand.

Inventory remains at historically low levels, while buyer demand is still strong, especially among millennials and Gen Z. This imbalance keeps a solid floor under home values.

"Home prices aren’t skyrocketing like they were, but they’re also not falling off a cliff," says Andrew Harkins. "In most areas, we’re seeing slower growth, not a reversal."

The Viral Crash Talk Isn’t Backed by Data

The idea of a 20% price drop is popular online—but not realistic in most markets. The current environment doesn’t mirror the conditions of 2008. Back then, we had oversupply, risky lending, and a wave of foreclosures. Today, lending standards are stronger, and homeowners have more equity than ever.

As Andrew Harkins explains on harkinslendingteam.com/home, "Waiting for a massive price dip could backfire. The market is adjusting, not collapsing."

Will Every Market Stay Strong?

Not necessarily. Real estate is local. Some overheated markets may see modest corrections or price plateaus. But across the country, a broad crash is highly unlikely.

"Some cities may experience slight pullbacks, especially where prices surged the fastest," says Andrew Harkins, "but overall, the market is more likely to normalize than to crash."

What Should Buyers Do in 2025?

Trying to time the market perfectly is risky. If you wait too long, you could miss out on opportunities or face even higher interest rates in 2026.

Instead, focus on finding a home that fits your budget and long-term goals. "Your goal shouldn’t be buying at the absolute bottom," says Andrew Harkins. "It should be finding the right home, with the right financing, at the right time for you."

Bottom Line

The market in 2025 is cooling, not crashing. While price growth has slowed, a steep drop isn’t likely due to limited supply and strong demand. The key for buyers? Stay informed, work with trusted professionals, and act when the right home and terms align.

Sources: Realtor.com, FreddieMac.com, NAR.realtor, CNBC.com