What to Expect from the Housing Market in the Second Half of 2025

If you’ve been keeping an eye on real estate headlines this year, you’re not alone in wondering where the market is headed next — especially here in Williamsburg, Virginia. Between shifting mortgage rates, tight inventory, and steady demand, many buyers and sellers are asking the same question: “Is now a good time to make a move?”

Fortunately, leading housing experts have weighed in with their updated forecasts for the rest of 2025 — and the outlook is more encouraging than you might expect. According to Business Insider, the combination of gradually easing rates, growing inventory, and moderating home prices may finally give buyers and sellers a more balanced playing field:

As mortgage rates go down this year, affordability may improve slightly for homebuyers. Inventory is also expected to grow, which should help moderate price growth and make finding a home easier.

Let’s take a closer look at what this means, especially if you're planning to buy or sell in the Williamsburg area.

1. Mortgage Rates May Ease — Just a Bit

While no one’s predicting a dramatic drop, the latest projections suggest we may see mortgage rates tick down slightly as we head toward the end of the year. As of early May, the average forecast across five leading institutions puts the 30-year fixed rate at around 6.39% by year’s end — with estimates ranging from 6.70% to 6.00% (see chart above).

Even a small decline can offer welcome relief for buyers — and sellers. Lower rates improve affordability and can help sellers attract more qualified buyers who were previously priced out.

Of course, mortgage rates will continue to respond to broader economic trends like inflation and job growth, so timing the market perfectly isn’t the goal. A better strategy? Focus on readiness and work with a trusted local expert who can guide you based on what’s happening right now in Williamsburg’s market.

2. Inventory Is Finally Growing

Here in Williamsburg, we’re starting to see more homeowners re-enter the market after months of waiting for rates to drop. This trend is happening nationally, too, and experts expect it to continue. According to Lance Lambert of ResiClub:

The fact that inventory is rising year-over-year . . . strongly suggests that national active housing inventory for sale is likely to end the year higher.

For buyers, this means more choices and less competition in the second half of the year. For sellers, it signals a prime window to list before inventory grows even further and makes it harder to stand out.

3. Home Prices Are Still Rising — But at a More Normal Pace

Even with more listings hitting the market, we’re still seeing price growth — just not at the breakneck pace of the past few years. The average of seven major forecasters shows home prices increasing by about 2.3% nationwide in 2025 (see chart above). That’s a sign of a healthier, more sustainable market.

In Williamsburg, local demand remains strong, especially among downsizers and retirees relocating from Northern Virginia, New Jersey, and beyond. Well-priced homes in established neighborhoods like Ford’s Colony and New Town are still moving quickly, but buyers are approaching the process more thoughtfully — and sellers should plan accordingly.

Bottom Line

The second half of 2025 could bring more stability to the housing market — and more opportunities, whether you're buying your first home, relocating, or downsizing in Williamsburg.

Want to talk about what these shifts mean for your situation? Let’s connect. We’ll help you make sense of the numbers, prepare your home or offer with confidence, and navigate the months ahead with a clear strategy that fits your goals.