What to expect for home prices in 2025

What they're saying: Zillow is predicting Twin Cities home values will rise just 0.2% in 2025, saying it will be one of the coolest markets in the country.

• Realtor.com, however, forecasts an increase of 6.2%, well above its 4% national prediction.

Reality check: Zillow predicted home prices here to fall 3% last year, but instead the median price rose 3.5% — reaching a peak of $389,000 in August.

Between the lines: Local experts have been more accurate in their predictions.

• Last year, David Arbit, director of research for Minnesota Realtors, accurately predicted home prices to rise 2-4% in 2024.

What we're watching Arbit said he doesn't like making predictions, especially with so many variables right now. But he couldn't resist.

• "I'd expect a 4-5% (price) increase for next year," he told Axios in an email.

The bottom line: While rising prices aren't great news for first-time home buyers, Arbit expects the volume of sales to increase 7-10% as "people continue to adjust to the new (mortgage) rate environment and wage growth hopefully continues to outpace inflation."