Connecticut's 2025 Housing Market Forecast: What the Second Half May Bring

Neil Caron
Jun 16
3 min read

June 16, 2025 | Market Trends, Connecticut Housing Market | Presented by ReadySetLoan™

As we enter the second half of 2025, many Connecticut homebuyers, sellers, and real estate professionals are asking the same question: where is the housing market headed? While nobody has a crystal ball, leading housing economists have released forecasts that give us a pretty good roadmap for what may unfold. At ReadySetLoan™, we've analyzed the latest data with one focus: what this means for the Connecticut housing and mortgage market.

Home Prices: Steady Growth with Regional Strength in Connecticut

While some parts of the country may see home price declines, Connecticut continues to show resilience. According to multiple forecasts:

Fannie Mae projects national home price growth of 4.1% for 2025.
NAR expects 3% appreciation this year, increasing to 4% in 2026.
Cotality forecasts 4.3% price growth from April 2025 to April 2026.
Zillow is more conservative, predicting a slight 1.4% decline nationally.

But here’s the key for Connecticut:

Markets in the Northeast, including many areas of Connecticut like Fairfield County, Hartford, New Haven, and Shoreline communities, continue to benefit from steady demand, limited inventory, and strong buyer interest. Compared to overheated markets in Florida and Texas where prices are softening, Connecticut's stable pricing offers confidence to both buyers and sellers.

Existing Home Sales: Recovery Gaining Momentum

Good news for Connecticut sellers: national forecasts expect existing home sales to improve.

NAR predicts a 6% increase in 2025.
Fannie Mae expects 4.4% growth.
MBA anticipates 4.3%.
Zillow projects 1.4% growth.

With Connecticut's desirable towns, excellent schools, and proximity to major job markets like New York and Boston, we are well-positioned to attract both local and relocating buyers as the overall sales volume grows.

Mortgage Rates: The Slow Descent Begins

Let’s address the elephant in the room for Connecticut homebuyers: mortgage rates.

MBA expects rates to average 6.6% in Q4 2025.
NAR forecasts 6.4% for the second half of the year.
Fannie Mae is slightly more optimistic at 6.1%

While rates above 6% may feel high compared to recent years, this slow and steady decline could bring more buyers back into the Connecticut housing market. As affordability gradually improves, we anticipate increased activity, especially from first-time homebuyers using programs like CHFA loans and other Connecticut-specific down payment assistance options.

Mortgage Originations: Modest Rebound Means Opportunity

Mortgage activity is projected to rise as more buyers enter the market:

Fannie Mae expects $1.99 trillion in originations for 2025.
MBA projects $2.07 trillion.

For Connecticut lenders, brokers, and buyers, this means more loan opportunities, especially for purchase transactions. Refinances will remain limited but may pick up as rates continue their slow descent.

RSL Piggy Points 🐷:

✨ Connecticut remains one of the strongest Northeast housing markets.
✨ Buyers should prepare now to take advantage of slightly improving affordability.
✨ Sellers will benefit from steady buyer demand in desirable Connecticut communities.
✨ Programs like CHFA and other first-time homebuyer assistance remain key.
✨ Rates are high but slowly trending downward, offering hope for 2026.

Neil’s Take 🎤:

"The Connecticut market is showing real stability right now. While rates remain elevated, we're seeing strong buyer demand in towns like West Hartford, Stamford, Fairfield, and Guilford. As rates slowly ease, I expect more first-time buyers to jump in, especially using programs designed for Connecticut residents. Buyers should stay close to their trusted mortgage advisors and stay informed."

Neil Caron, Area Sales Manager, CMG Mortgage

ReadySetLoan’s Bottom Line

Connecticut’s housing market may not experience huge price swings, but that’s actually good news. Our local market continues to offer opportunity for both buyers and sellers who are prepared.

At ReadySetLoan™, we remain committed to being your trusted educational resource, helping you navigate every shift with confidence.

If you’re thinking about buying, selling, or simply want to understand how these trends affect your options, visit ReadySetLoan™ to schedule a one-on-one consultation. We're here to educate, guide, and support you every step of the way.