Housing Market Forecasts for the Second Half of the Year

by Gwinn Volen

Housing Market Forecasts for the Second Half of the Year

Q1 2025 home sales in the Jacksonville area were down 7% from Q1 2024. Economic uncertainty, triggered by increasing mortgage rates and a volatile stock market, is suppressing buyer demand.

Housing and financial experts are starting to release their projections for the balance of the year.

Mortgage Rates Expected to Dip Slightly

While a major drop isn’t expected, forecasters call for a slight drop in rates in the months ahead as the economic outlook becomes more certain. Should rates drop, more buyers would likely enter the market.

Currently, 30-year mortgage rates are averaging 7% nationally. The chart below shows where 5 major real estate players predict mortgage rates will be by year-end 2025. Even a small decline would be a welcome change.

Inventory Should Continue to Grow

Area inventory has increased, a positive change for buyers and a frustration for sellers. St Johns County has 5.2 months of inventory, up 26 percent from April 2024, and Duval has 4.3 months of inventory, up 33% from April 2024.

By year-end, predictions suggest that we will be in more of a buyer’s market nationally, with our local market expected to follow suit. 

Should rates drop, more homeowners currently locked into low existing mortgage rates may enter the market, increasing housing supply while also adding buyers to the market.

Home Prices Will Continue to Moderate

As inventory increases, it puts downward pressure on home prices. National predictions show a modest increase in home prices through the end of the year, 2.3%, on average, compared to growth of ~4.5% in 2024.

This is positive news for homebuyers. And, it’s a mindset adjustment for sellers who were accustomed to rapid price increases since early 2020. Duval and St Johns County saw a slight dip in home prices in Q1 2025 vs Q4 2024, which is a typical seasonal fluctuation. Q2 should show an uptick. 

As savvy real estate buyers/sellers know, location is everything. Though I am sharing national and regional trends, real estate is also beholden to micro-economics where community-specific dynamics can play out very differently. Keep an eye on our monthly newsletter, which breaks down market trends in our local communities. 

About the Author

Gwinn Volen is a REALTOR, Owner and CEO for The Volen Group, Keller Williams Luxury International, a top real estate team in Northeast Florida's Ponte Vedra Beach community with annual sales of over $100M. For real estate in Ponte Vedra Beach or the surrounding area, contact Gwinn Volen at 904.314.5188 or email thevolengroup@gmail.com.

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