Home sales — and prices — are likely to increase in 2025, according to the latest market report from the real estate website Zillow. 

Next year, about 100,000 more homes will be sold in the United States, with values growing about 2.2%, the forecast said.

“There’s a strong sense of déjà vu on tap for 2025,” Zillow Chief Economist Skylar Olsen said in a statement Monday. “We are once again expecting mortgage rates to get better gradually, and opportunities for buyers should follow, but be prepared for plenty of bumps on that path.”

After peaking in October 2023, mortgage rates started falling in August only to rise again once the Federal Reserve began cutting interest rates. The average rate for a 30-year fixed mortgage is currently 6.95%, according to Mortgage News Daily.

The Fed is expected to lower interest rates by a quarter point Wednesday. Zillow expects mortgage rates will slowly decline in 2025, leading to a gradual growth in sales as well as home appreciation. 

In 2025, Zillow expects home sales will increase to 4.16 million, up from 4.06 million this year. The increase will be due, in part, to more homes hitting the market. 

For-sale inventory is “clawing its way out of a deep hole that developed in the pandemic,” according to Zillow. While inventories are about 26% lower than 2019, the shortfall is shrinking.