As the U.S. housing market braces for continued economic shifts, Goldman Sachs Research has updated its home price forecast, projecting a 4.4% growth in 2025. This revised outlook stems from expected Federal Reserve rate cuts, anticipated to gradually reduce borrowing costs while the economy remains steady.
Goldman Sachs analysts note that falling interest rates could provide much-needed affordability relief for buyers, especially after a peak of 7.8% in mortgage rates in late 2023. “Goldman Sachs research suggests we are past the peak of rates and they believe we will see a steady, albeit slow, decline over the coming years. While affordability challenges persist, the overall economic outlook remains firm, enabling gradual growth in both income and disposable spending for potential homebuyers.
Despite ongoing high prices, homeownership remains a priority for many Americans. Factors like household formation, particularly among individuals aged 30-39, are expected to support demand, as this cohort reaches the stage of life associated with increased home-buying.

Regional Impact: Oregon and Southwest Washington
In Oregon and Southwest Washington, Cascade Hasson Sotheby’s International Realty reports that affordability pressures are somewhat cushioned by persistent demand and limited inventory. In September 2024, Oregon’s median home price rose to $506,200, reflecting modest annual growth of 0.7%. Southwest Washington experienced similar resilience, as proximity to Portland and other desirable regions keeps demand high.
“Amid affordability challenges, Oregon and Southwest Washington’s market continues to attract both local and out-of-state buyers seeking the Pacific Northwest lifestyle,” said Gary Nolan, Chief Marketing and Business Strategy Officer at Cascade Hasson Sotheby’s International Realty. “Our hyper-local approach allows us to connect with clients in meaningful ways, providing them with insight into not just the property but the lifestyle that comes with it. This connection is why we’ve maintained our position as Oregon’s top-ranked real estate brokerage for the past two years.”

A Path Forward for U.S. Housing Affordability
Goldman Sachs projects that a reduction in mortgage rates, combined with steady income growth, will gradually improve affordability over the next five years. They expect real disposable income to increase by 2.4% in 2024 and 2.1% in 2025, helping to offset rising home prices. The forecasted trend suggests that the affordability crisis will ease slowly as home price growth aligns more closely with income levels.
While these conditions may not yield immediate affordability, the gradual changes are expected to benefit markets nationwide, including the Pacific Northwest. Cascade Hasson Sotheby’s International Realty, known for its expertise in luxury and high-demand regions, is positioned to guide clients effectively as the market stabilizes.
Regional Strengths and Future Outlook
Goldman Sachs identifies distinct regional trends, noting particularly strong growth in the Midwest, Northeast, and certain California metros. Contrastingly, areas in Florida and the Southeast, where affordability has deteriorated rapidly, may face slower growth. However, markets in the Pacific Northwest, with their inherent demand and limited supply, are expected to retain their stability and appeal, especially as interest rates slowly decline.
In summary, while affordability remains a challenge, anticipated rate cuts and steady economic conditions indicate a cautiously optimistic outlook for U.S. home prices in the years ahead. Cascade Hasson Sotheby’s International Realty continues to leverage its market knowledge and deep client relationships to support buyers and sellers through these evolving conditions.
To view daily updated market reports in Oregon and SW Washington visit CacadeHasson.com