San Antonio Housing Market Outlook for 2025: What Buyers Can Expect

Like most cities across the U.S., the San Antonio real estate market has cooled considerably over the past year or so. This is due to a number of factors, ranging from higher mortgage rates to inflation with a dash of economic uncertainty.

Here are some of the key changes we’ve seen over the past few years:

• Three years ago: Homes were selling quickly and often for more than the asking price. House values were rising rapidly due to strong demand. It was a classic seller’s market.
• Now and into 2025: Homes are taking much longer to sell and rarely go for more than the asking price. Home values are declining, while inventory is growing. It’s now moving into buyer’s market territory.

For the rest of this year and into 2025, the San Antonio housing market will continue to move at a slower pace than in the past. One prediction called for a continued decline in prices, as well. 

5 Predictions for the San Antonio Housing Market

Let’s start with a big disclaimer. No one can predict future housing market trends with complete accuracy. There are too many variables involved.

But we can offer a few educated guesses, by analyzing current supply-and-demand factors and projecting into the near future.

So, here are five predictions for the San Antonio real estate market in 2025:

1. Home prices will decline a bit further over the coming months, level off during the spring of 2025, and rise gradually thereafter.
2. Home buyers will have more properties to choose from in 2025, compared to the past few years.
3. Home buyers will enjoy lower mortgage rates, overall, compared to the past few years.
4. Buyers who might have been hesitant in the past will re-enter the real estate market in 2025, partly due to prediction #3 above.
5. Buyers will have an opportunity to come in at the “bottom of the market” next year, with the prospect of steady equity for years to come.

Let’s take a deeper dive into these five predictions, starting with home prices.

1. Prices could decline further going into 2025.

Home prices across the San Antonio metro area peaked at an all-time high during the summer of 2022. That same pattern occurred in most Texas cities, following the unprecedented price growth of the pandemic era.

But since then, home values in San Antonio have followed a downward trajectory. 

And at least one forecast (Zillow) suggests prices might have further to fall, before turning north again.

The graphic below shows the median home price for the San Antonio-New Braunfels metropolitan area, going back several years. It’s based on data provided by Zillow, with explanatory notes from our experts here at HBI.

As you can see, the San Antonio housing market experienced steep home-price appreciation that started in late 2020 and continued until 2022.

You can also see how this real estate market experienced a downturn in prices that is still going on to this day (as of fall 2024).

Zillow recently predicted that house values in San Antonio have more room to fall. They predicted the median price for the metro area would decline by -1.3% from August 2024 to August 2025. 

Prediction #1: The San Antonio-area real estate market could experience additional price erosion through the end of this year and into the first quarter of 2025. Beyond that, prices could level off and begin to rise again, at a very gradual pace.

2. Buyers should have an easier time finding a home.

Here’s some good news for San Antonio-area home buyers. Inventory levels have risen over the past year, a positive trend that could continue into 2025 as well.

In fact, San Antonio is one of the few metro areas in the U.S. where housing market inventory currently exceeds pre-pandemic levels.

According to a September 2024 report from Realtor.com:

“Of the 50 largest metro areas, just 11 had higher levels of inventory in August compared with pre-pandemic levels, including Austin, Texas (+36.6%), Memphis, Tenn. (+28.7%) and San Antonio (+25.2%).”

Prediction #2: Home buyers will have more properties to choose from in 2025, when compared to the past few years. Inventory growth could shift the negotiating dynamic to give buyers more bargaining power.

3. Lower mortgage rates will stimulate the market.

Mortgage rates have followed a downward trajectory since the spring of this year, and they could drop further as we head into 2025.

This could stimulate the San Antonio real estate market by bringing hesitant home buyers off the sidelines and into the market, eager to lock in a low interest rate.

Earlier this month, the Federal Reserve enacted its first interest rate cut since the early days of the COVID pandemic. And it was bigger than most people expected.

The Fed reduced the benchmark federal funds rate by half a percentage point. Historically, most of their cuts have been a quarter of a percent, versus a half. So this one is a pretty big deal.

The Fed doesn’t control mortgage rates directly. But their policies do influence the general movement of those interest rates. We will likely see evidence of this over the coming weeks.

We expect the average rate for a 30-year fixed mortgage to drop into the upper 5% range in the near future. Additional declines could occur through the end of this year and into 2025.

Ted Rossman, an industry analyst for Bankrate.com, recent stated: “My best guess is that the average 30-year fixed mortgage rate will be around 5.5% a year from now.”

Similarly, Wells Fargo economist Charlie Dougherty predicted that the average rate for a 30-year fixed mortgage loan will drop to around 5.5% by the end of 2025.

Prediction #3: San Antonio home buyers will enjoy lower mortgage rates in 2025, compared to those who purchased a property during the past couple of years. This could bring more buyers into the market next year, which brings us to prediction #4.

4. More buyers will enter the market in 2025.

According to the San Antonio Board of REALTORS®, home sales in the area have declined for the past three years in a row. That’s partly due to a sharp rise in mortgage rates that began in 2022 and stretched all the way through 2023.

But mortgage rates and home prices have declined over the past year, increasing affordability and motivating buyers.

In pricier real estate markets like California and New York, a drop in mortgage rates might have little impact on home buying activity. But in more affordable areas like San Antonio, Texas, lower borrowing costs could accelerate the housing market.

Prediction #4: Like many cities across the nation, San Antonio will experience an uptick in home sales during 2025. Sensing that a cyclical price “bottom” is near, more buyers will stream into the market.

5. Prices will bottom out, giving buyers an opportunity.

Home values in San Antonio have declined over the past year, after hitting a post-pandemic peak. (A pattern that occurred in most U.S. cities.) But aside from that anomaly, San Antonio has a long history of steadily rising home values.

We expect prices to decline a bit more over the coming months, before finding a bottom. Beyond that, prices will likely resume a gradual rise that could last for years.

The “bottom” is the lowest point in a market cycle, before prices start rising again. In the San Antonio metro area, that cyclical low point could come within the next few months.

Prediction #5: In early 2025, San Antonio home buyers will be able to come in at the bottom of the market, with a possibility of steady equity growth over the coming years.

Disclaimer: This report contains forecasts and other forward-looking views, which are the equivalent of an educated guess. The Home Buying Institute makes no claims or assertions about future real estate trends.