After 2024 had seen the slowest annual total for existing home sales since 1995, the new 2025 Midyear Housing Forecast Update from Realtor.com estimates this year might fall even lower.

The report stated that Realtor.com’s initial expectations for 2025 were not overly bright from a home sales perspective. “We anticipated just a small gain for the calendar year, on top of a 2024 that was the slowest annual total for existing sales since 1995 at just 4.06 million.”

Estimates for existing home sales have been revised down to -1.5% for a total of 4 million homes sold. That figure is down 3% from the original forecast of a home sales increase this year of 1.5% (4.07 million). That would be well below the 2013-2019 historical data, which averaged 5.28 million annual totals.

Existing home for-sale inventory was also significantly higher than the original forecast. The updated forecast sees 16.9% inventory, compared to the 11.7% estimate from December 2024.

Despite lower estimates, the report took an optimistic tone, stating: “The economy in 2025 has proven resilient, helping to set a foundation for housing activity.”

The revised mortgage rate forecast for 2025 (year-end) was 6.4%, up 0.2% from the initial forecast published in December 2024. The average 2025 rate forecast is 6.7%, up 0.4% from the 2024 initial forecast.

The report focused on many other key housing indicators, including a revised forecast of a 2.5% year-over-year existing home median price appreciation (a decrease from the initial forecast earlier this year of 3.7% increase).

Single family home housing starts had originally been forecast to increase 13.8% in 2025, but the revised figures have dropped 17.5% to -3.7% (0.98 million year-over-year).

The report defends its projection as having been “decent,” registering 2% behind the sales pace actually observed in 2025. “In other words, home sales year-to-date have been slightly better than originally anticipated as the early year boost from mortgage rates dipping to just over 6% in September propelled a strong start to 2025.”

But home sales have slipped and now register lower than the 2024 pace. In the spring selling season, actual data fell modestly behind the original forecast. 

“We anticipate sales in the second half of 2025 to mirror the more modest spring season, pacing slightly above and slightly below year-ago pace from month to month. As home sales hew close to the 4 million mark, this would mean that the annual tally for home sales in 2025 registers slightly behind the year-ago pace (-1.5%).”