2025 may bring more homes but with familiar high prices.

Why it matters: Many people will remain locked out of homeownership.

Here's what experts and industry pros predict is in store for mortgage rates, new builds, moves and more next year.

📈 Rates will remain above 6%

U.S. mortgage rates are expected to be in the low- to mid-6% range at the end of 2025, according to Realtor.com chief economist Danielle Hale.

• Redfin's economists forecast rates to stay higher, near 7%.

Between the lines: "We're not going to see a big change in the affordability picture," Hale tells Axios.

• "It's still going to be challenging to get into the housing market," especially for first-time buyers, she says.

State of play: Lower mortgage rates "could even exacerbate" the country's housing crunch, Josh Altman, real estate agent and former cast member of "Million Dollar Listing L.A.," tells Axios.

• That's because "as mortgages become more affordable, more buyers are going to enter the market, creating greater competition and ultimately higher home prices," says Altman, who's also co-founder of Redy, a platform for home sellers and agents.

💸 More rent increases

As renters postpone house purchases, increased apartment demand and less new apartment construction pave the way for landlords to raise rents.

Case in point: "Probably the biggest story this year that we've seen [is] from people coming in the front door and then not leaving [out] the back door," Joe Fisher, president of publicly traded apartment owner UDR, told The Wall Street Journal.

🔐 Fewer "locked-in" homeowners

The mortgage "lock-in" effect, which has contributed to the housing market's woes by discouraging homeowners from moving, won't disappear next year — but it will lessen, Hale says.

By the numbers: In mid-2024, 84% of homeowners with a mortgage had a rate under 6%, down from 89% a year earlier, per a Realtor.com analysis.

• Hale expects that share to fall to 75% by the end of 2025, as more people choose to part with their current home loan.

More predictions

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If you can't afford a house in Portland, what about an investment property somewhere else?

State of play: Some people are becoming homeowners while continuing to live in their rental apartments.

How it works: That approach can make sense for renters with extra cash who want to remain in a costly area and start building equity, according to Realtor.com's Hale.

• They could "look for a less-expensive market where their savings might be able to translate into a nice down payment," Hale told CNBC.
• Dubbed "rentvesting," the strategy often involves taking on landlord responsibility from afar.

The big picture: On average, starter home prices across the country are over 51% higher than they were before the pandemic, with the median reaching $250,000 in August, per a recent Redfin analysis.

• In several major U.S. metros, including Portland, buyers need at least six-figure incomes to swing the area's typical starter home.

Keep reading

The average rate on the 30-year-mortgage was around 6.9% last week, according to Freddie Mac.

The big picture: That's up from around 6% when the Federal Reserve cut interest rates in September.

• The central bank has continued to lower rates, while signaling fewer cuts are coming in 2025.

The bottom line: Mortgage rates hovered mostly between 6% and 7% in 2024.

Go deeper: Why mortgage rates are climbing

🏥 Ahead of a potential strike on Friday, Providence is attempting to continue negotiations with some 150 doctors and nurse practitioners, but not with the other 5,000 workers represented by Oregon Nurses Association. (OPB)

🌄 The latest effort to provide federal protections for the vast and rugged Owyhee Canyonlands died in Congress, but President Biden could still do so through an Executive Order before his term ends Jan. 20. (Oregon Capital Chronicle)

🏗️ Hoffman Construction, one of Oregon's largest private companies, will leave its headquarters in downtown Portland this month for new digs in Lake Oswego. (The Oregonian)

Many Portland-area homes have basements, which can often be under-utilized square footage.

👀 We want to hear about — and see photos of — your downstairs space.

• Have you upgraded the basement with a wine cellar, workout studio or other fancy features?
• Added a bunker or safe room for extra security?
• If you've kept its retro charm, any plans to renovate?

📧 Email [email protected] with your full name and neighborhood. We may feature your insights in an upcoming story.