What to Expect for the Rest of 2025: Mid-Year Housing Market Update

Welcome to our 2025 Mid-Year Real Estate Market Update. It’s hard to believe, we're approaching the halfway mark of 2025. There’s a lot happening—especially when it comes to interest rates, home prices, inventory, and the rental market. Whether you're thinking about buying, selling, or investing, this update is packed with insights to help you make smarter moves in the months ahead. Let’s jump in.

Interest Rates & Economic Outlook

Let’s start with interest rates. Right now, we're expecting mortgage rates to hover between 6.5% and 6.9% through the rest of the year. Not ideal—but in line with historical averages and improved from the 7% rates we’ve seen. One of the big factors here is the ongoing tariff negotiations. As those start to get worked out, it should reduce some of the economic uncertainty we've been dealing with.

And when uncertainty goes down, we typically see a drop in the 10-year Treasury yield, which is a key benchmark for mortgage rates. Right now, there’s an unusually large spread between the 10-year Treasury and 30-year fixed mortgage rates—and that’s largely due to market volatility. As that spread narrows, we could see mortgage rates settle on the lower end of the range.

And the market is already showing signs of life—as soon as rates dip, buyers are stepping back in. The demand is there; buyers are just waiting for the right window.

Huntsville Market Performance

Now let’s talk local—Huntsville continues to be one of the strongest markets in the Southeast. We’re forecasting a 7% increase in closed home sales for the year. That’s significant—especially after the slowdown we saw last year.

Prices are climbing, too. We expect the average sales price to be up 5% year-over-year, which could push the average home price in our market to peak above $380,000 for the first time. That means more equity for sellers and more urgency for buyers who want to get in before prices rise further.

Inventory & Buyer Options

One of the best developments for buyers is this: inventory is up—way up. We’re seeing more than a 25% increase in available homes on the market compared to last year.

What does that mean? For buyers, it’s more options and a bit more negotiating power in some submarkets. However, we’re still seeing full price and multiple offers for many of the area’s hottest homes. For sellers, it means you need to be strategic. Price it right, work on the home’s curb appeal, and hire an agent who can help make your home stand out (who you hire matters).

Rental Market Reality Check

We’re also seeing some big shifts in the rental market. Right now, landlords are offering concessions like reduced rent and free month promos to fill units. It might sound tempting—especially if you're hesitant about buying at today's rates.

But here’s the reality: renting is 100% interest. You’re building your landlord’s equity, not your own. On average, homeowners have 40 times the net worth of renters. That’s not a small gap—it’s a life-changing difference, and it’s driven largely by home equity.

What’s Coming Next

And don’t forget—Huntsville isn’t slowing down anytime soon. With FBI headquarters expanding and Space Command jobs likely on the way, we’re going to see continued population and job growth. That brings stability and long-term strength to our real estate market.

As the economy balances out, and more jobs bring more people into the area, we’ll likely see the rental market tighten again—shifting power back to landlords. So if you’re thinking long-term, now might be the best time to make your move while incentives are still on the table and inventory is up.

The bottom line? Whether you're buying your first home, upgrading, or investing—timing matters, strategy matters, and who you hire MATTERS. If you’ve got questions or want to make a move, our team is here to help.