2025 Housing Predictions for Fairfield County

Happy New Year! As we step into 2025, I want to take a moment to wish you and your family a year filled with health and happiness. I’m excited for the opportunities ahead and look forward to building new relationships and strengthening existing ones in the months to come.

As we move into this new year, the most common question I’m asked is, “What can we expect in 2025?” While the housing market is constantly changing and evolving, I can make predictions based on trends and what I’ve observed over the past year. Reflecting on 2024, there are valuable insights into market dynamics, and these lessons help anticipate what’s ahead.

Here’s a look at what 2024 has shown us and what we expect from the housing market in 2025. 
 
A Slow but Steady Influx of Inventory

One of the defining features of the Fairfield County real estate market in recent years has been consistently low inventory, and 2025 appears to be no different. Homeowners are anticipated to list their properties at a steady pace, sustaining the competitive market dynamics we've come to expect. With a current absorption rate of just 2.5 months across the county, inventory is quickly absorbed as it becomes available, keeping demand particularly strong in desirable towns.

In 2024, inventory declined across most towns, with Wilton being the exception. Compared to the already low levels of 2023, Fairfield saw a -1.7% drop, Westport -15.7%, Easton -21.7%, New Canaan -14.7%, and Darien -25.6%, while Wilton experienced a +5.7% increase.
 
Competitive Market Conditions

With tight inventory and steady demand, Fairfield County is expected to remain a highly competitive market in 2025. Sellers who price their homes correctly and ensure they are in good condition can anticipate strong interest and multiple offers. While home prices are expected to continue rising, the pace of growth may slow, all dependent on inventory levels.
 
In 2024, average home prices rose across all towns in Fairfield County. Fairfield saw a 6.6% increase, Westport 4.3%, Easton 13.1%, New Canaan 10.6%, Darien 2.9%, and Wilton 10.6%. These increases reflect the ongoing imbalance between supply and demand. If more homes come on the market, price growth is likely to stabilize and become more consistent.
 
However, with interest rates predicted to remain around 6% throughout 2025, a significant shift in inventory levels is unlikely. Many homeowners are holding onto their 3-4% mortgage rates, making it difficult to justify moving and taking on a higher mortgage rate. Until rates drop closer to 5%, we are unlikely to see the influx of new listings needed to ease inventory constraints.
 
Interest Rates Holding Steady
 
Interest rates today have reached their highest levels since July 2024, despite The Fed implementing several rate cuts throughout last year. It’s important to remember that long-term mortgage rates are influenced by a variety of factors, including the broader economy, job market trends, and, most significantly, inflation. When Federal Reserve Chair Jerome Powell announced that there would only be two rate cuts in 2025, instead of the previously anticipated four, uncertainty surged, causing interest rates to climb even higher.
 
As we move forward in 2025, understanding how interest rates may evolve and the factors influencing them will be essential for anyone navigating the real estate market. Looking ahead, top economists—including Fannie Mae (6.4%), Wells Fargo (6.3%), and Goldman Sachs (above 6%)—predict that mortgage rates will hover within the 6% range throughout 2025. While these predictions offer valuable guidance, they are based on current trends and data, meaning they should be viewed as directional rather than definitive.

This relative stability provides buyers with a clearer understanding of home affordability, making it easier to plan purchases and financing options. For sellers, it’s an encouraging sign that buyer demand will remain strong as the market adjusts to this new normal. As we move forward in 2025, understanding how interest rates may evolve and the factors influencing them will be essential for anyone navigating the real estate market.
 
What This Means for Sellers

For those considering selling, 2025 offers an excellent opportunity to capitalize on continued high demand. Homes that are well-maintained and strategically priced will attract strong interest. As always, presentation matters. From staging to professional photography, investing in showcasing your home can make all the difference.
 
What This Means for Buyers

For buyers, it’s essential to stay prepared to act quickly and decisively when the right property becomes available. Patience and preparation will be your best allies. Securing pre-approval, understanding your budget, and working closely with a local agent who knows the market will position you to succeed. While competition can be fierce, there are opportunities to be found for those who stay informed and ready to act.
 
Fairfield County remains a highly sought-after destination for its exceptional schools, vibrant communities, and proximity to New York City. While the market may continue to pose challenges for both buyers and sellers, it also offers unique opportunities for those who approach it with a strategic mindset.
 
Whether you’re looking to buy or sell in 2025, let’s connect to navigate this dynamic market together. With the right guidance, you can achieve your real estate goals and make the most of what Fairfield County has to offer.