As we step further into the 2020s, the real estate market continues to shift. The past few years have seen soaring home prices, rising interest rates, and changing buyer behavior. But what’s next?
Experts across real estate, finance, and economics are now weighing in on what the next five years could look like for homeowners, investors, renters, and real estate professionals.
Here’s what the forecast says—and what you should be watching closely.
After years of sharp increases, many experts believe home prices will continue to rise, but at a much slower pace. According to the National Association of Realtors (NAR), housing prices are expected to grow at a rate of about 2% to 4% per year—a far cry from the double-digit spikes seen during the pandemic years.
Why this matters:
This slow growth could help balance the market, giving first-time buyers a better chance to enter.
Expert Insight:
“Housing prices aren’t crashing, but the days of 15% annual growth are behind us,” says Dana Manning, an economist at MarketWatch. “Sellers will still make a profit, but buyers will feel a little less squeezed.”
Mortgage rates rose sharply in 2022 and 2023, shocking many would-be buyers. While rates may come down slightly, most experts say they’re unlikely to return to pre-pandemic lows.
What to expect:
Tip:
If you’re thinking of buying, lock in rates when they dip—and consider refinancing later if rates drop again.
With home ownership harder to afford, renting will remain the top choice for many young adults and urban dwellers. Cities like New York, Los Angeles, and Austin may see rent increases of 3% to 6% annually, especially in high-demand areas.
Why is this happening?
Advice for renters:
Start your search early, and consider locking in longer leases to avoid rising costs.
The pandemic sparked a wave of people moving to suburbs and smaller cities—and that trend is expected to continue. Cities like Boise, Idaho, and Greenville, South Carolina, are seeing population booms.
Why?
Investor Tip:
These “Zoom towns” may offer the best real estate returns in the next five years, with lower entry costs and higher demand.
The real estate industry is going digital. In the next five years, expect to see:
Why it matters:
This could make buying or selling a home faster, cheaper, and easier.
Quote:
“Technology is removing old roadblocks in real estate,” says Sarah Patel, a PropTech expert. “Expect big savings in time and fees.”
One of the biggest issues in recent years was low housing inventory—not enough homes for sale. Builders are now working to catch up, and experts believe new construction will rise by 2026.
Good news for buyers:
More homes on the market could ease bidding wars and help stabilize prices.
Caution:
Labor shortages and higher construction costs may slow this recovery, especially in areas with strict zoning laws.
From rising sea levels to wildfires, climate risks are starting to influence where people buy homes. In the next five years:
Watch for:
Climate risk reports may become standard in home listings, especially in coastal or desert regions.
Whether you’re planning to buy, sell, or invest, understanding the next five years in real estate is key. Here’s a quick summary:
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