2025 Real Estate Market Outlook: Interest Rates, Opportunities, and Top Investment Locations

The year 2025 stands out as a complex yet opportunity-filled period for the global real estate market. In the US and Europe, mortgage rates remain at their highest levels in over 15 years (ranging between 6.5% and 6.9%), significantly increasing purchasing costs for many buyers. However, for investors, this high-rate environment presents a chance to negotiate better deals and acquire properties in high-potential areas at competitive prices, anticipating future value growth.

As of July 2025, the average 5-year adjustable-rate mortgage stands at 7.32%. Experts suggest that rates may begin to gradually decline in the final quarter of the year—potentially creating a strategic entry point for those planning investments in 2026.

In the United States, Manchester–Nashua in New Hampshire has emerged as the hottest housing market of 2025. Offering affordable homes, a robust job market, and high quality of life, the region tops investors’ watchlists.

On the commercial real estate side, EfTEN Real Estate Fund AS reported a €39,000 month-over-month increase in rental income in July 2025—a clear indication that rental yield remains a strong argument for investment in many markets.

For those considering property investments in 2025, key recommendations include: closely tracking interest rate trends, targeting areas with strong rental potential, and maintaining disciplined liquidity management.