Luxury Home Prices Expected to Increase in 2025

Luxury home prices are expected to increase throughout 2025 faster than their non-luxury counterparts for the first time in years, according to various housing predictions for 2025.

According to a report from Zillow, low luxury home inventory has increased competition, putting more pressure on home values compared to non-luxury listings. In fact, July 2024 recorded inventory levels of luxury homes at 46.9% below pre-pandemic levels. During this same time, Zillow recorded a 3.9% price increase in luxury homes from July 2023 to July 2024, compared to midrange listings which increased by only 3.2%.

“For every month from January 2019 — the earliest year-over-year change in Zillow’s records — through January 2024, typical home values were outpacing luxury homes on an annual basis. For every month since, luxury home values have been growing faster.” Says Zillow.

Additionally, the overall median home sale price and home sales in America are also expected to increase throughout 2025. Redfin’s Housing Market Predictions for 2025 outline a 4% home price increase by the end of the year, however, Realtor.com only predicts a 3.7% increase, according to their National Housing Forecast for 2025.

“Prices will rise at a pace similar to that of the second half of 2024  because we don’t expect there to be enough new inventory to meet demand.” Says the Redfin report. 

Both Realtor.com and Redfin also predict an increase in home sales, with mortgage rates and available inventory as the main deciding factors. While Redfin predicts home sales to increase between 2% and 9%, Realtor.com only expects an increase of 1.5% by the end of 2025.

View more Luxury Realty Articles here.

Sources:
Luxury home values are rising faster than typical homes for the first time in years – Zillow.com
Redfin’s 2025 Predictions: Pent-Up Demand Will Lead to More Home Sales, But Many Would-Be Buyers Will Opt to Rent – Redfin.com
Realtor.com 2025 Housing Forecast – Realtor.com