Thinking about investing in a smart home? There is no better time than 2025. Technological trends and advancements like the Internet of Things, artificial intelligence (AI), and machine learning have helped create numerous smart home applications that can help implement home automation and provide increased convenience.
The result is a smart home market that is projected to churn out over $170 billion in revenue in 2025. Furthermore, the smart home market is only expected to grow, with household penetration expected to reach 77.6% in 2025 and 92.5% by 2029.
Clearly, smart homes are the future of domestic real estate, and 2025 will be a big year in the smart home market. In this article, we will discuss this future, exploring some smart home trends to expect in 2025 and beyond. Let us dive in!
What is a Smart Home?
Smart homes are regular homes with tech-enabled features that help to automate home management. These homes use internet-powered applications and appliances that provide easier and more efficient ways to achieve common tasks around the home, leading to increased convenience, energy savings, and enhanced security. Some of the most common smart devices you might want to have in your home include:
- Smart speakers that allow you to provide audio commands and control other devices in a network. These speakers often function as a central hub, allowing you to control other compatible smart devices within your home’s ecosystem.
- Smart lights with adjustable brightness, color, and even scheduling.
- Smart thermostats to optimize heating and cooling.
- Smart plugs that allow you to turn appliances on/off remotely.
- Smart security systems that include cameras, motion detectors, alarms, and smart locks that allow for keyless entry and remote access management.
- Flood monitoring technology.
“The beauty of smart home technology in 2025 lies in its accessibility and impact,” says Greg Arnold, General Manager at Kitchen Mania. “From energy-efficient solutions to enhanced security features, these innovations are no longer just luxuries—they’re essential tools for improving quality of life and future-proofing your home.”
How Smart Homes Will Evolve in 2025
As we have shared, smart homes are already highly advanced, with lots of futuristic features on offer. However, as technological trends show no signs of slowing, smart homes are likely to become even smarter in the coming years.
The major driver of the development of smart home technology in 2025 is likely to be AI, as it offers unlimited scope for the development of new features that can enhance existing smart appliances and applications.
According to Grant Aldrich, Founder of Online Degree, “the integration of AI and IoT in homes reflects the growing trend of mutual adaptation. On the one hand, there’s technology adapting to human needs, and on the other, there’s humans adapting to the potential and capacity of technology.”
In 2025, more companies will likely attempt to create and integrate more advanced AI applications into their products. A good example of this is Samsung, which is currently pushing to include AI features as a significant component of all its product lines.
For instance, Samsung’s latest TVs incorporate AI to interact with other smart home gadgets, providing real-time updates, safety alerts, and even offering content-related information like recipes for meals shown on-screen.
Max Tang, CMO at GEEKOM, shares, “AI-driven smart homes represent the next big leap in how we interact with our living spaces. The ability to predict user behavior and offer personalized solutions, from energy management to entertainment, makes 2025 an exciting time for innovation in this space.”
Here are some other ways AI is likely to improve smart homes in 2025:
1. Energy Management
Using energy efficiently is one of the most important themes in modern construction and home management as more people embrace the concept of reducing their energy footprint. AI deployed in smart homes has proven to be an immensely powerful energy management tool, a trend that is likely to be developed in 2025.
Adrian Lorga, Founder & President at Stairhopper Movers, explains, “sustainability will be at the heart of smart homes in 2025. From solar power integration to real-time energy monitoring, AI will enable homeowners to live more efficiently and reduce their environmental footprint.”
AI-powered Home Energy Management Systems (HEMS) offer real-time monitoring of energy production, storage, and consumption. Thanks to AI and machine learning, these tools can use predictive analytics to optimize energy usage based on factors like weather conditions.
2. Matter and Increased Device Interoperability
Alongside AI, ‘Matter,’ an open, universal standard for smart home technology developed by the Connectivity Standards Alliance (CSA), will have a significant impact on how smart homes work in 2025.
Simon Healy, Director at Wardrobe Warehouse, agrees with this idea. As he puts it, “the success of smart home systems lies in their ability to communicate seamlessly. Standards like ‘Matter’ are a game-changer, ensuring devices from different brands work harmoniously to create a truly connected home.”
With the increasing adoption of ‘Matter,’ smart home devices from different manufacturers will, in turn, become increasingly compatible with each other, leading to increased functionality in smart homes.
3. Focus on Privacy and Security
Smart homes rely on network connections between devices to enable device-to-device communication. While this can offer incredible degrees of convenience and access, it also presents significant security risks.
For example, a 2018 study by HP found that approximately 70% of Internet of Things (IoT) devices, including many smart home devices, contain vulnerabilities. The study also found that 90% of personal data collected during the installation of smart devices was intercepted.
Jonathan Feniak, General Counsel at LLC Attorney, says, “with the rapid expansion of smart home technology, legal frameworks and best practices will have to evolve to address data security and user privacy. In 2025, homeowners will demand devices that not only deliver convenience but also assure them that their personal data is protected.”
Reputable brands will be looking to create better in-built defenses and fixes for these vulnerabilities. While this might mean an increased degree of complexity in managing smart homes, the trade-off and benefits in terms of security will make the inconvenience well worth it.
4. Evolution of Smart Home Interfaces
As with most apps, smart home devices are becoming more intuitive. Many devices now feature advanced voice control and even gesture recognition. Futuristic technologies like virtual or augmented reality are also increasingly available in smart home appliances. These trends will gain wider acceptance in 2025.
According to Nick Marshall, General Manager at Window Factory, “Smart homes are set to embrace augmented reality to a greater extent in 2025. Imagine a system that overlays maintenance alerts or instructions directly onto your field of view—this level of functionality will redefine convenience and efficiency.”
Final Word
Smart homes are the new normal when it comes to housing standards. In 2025, as more people adopt smart homes, homeowners will look to incorporate further advancements in technology. The integration of advanced AI and universal standards like Matter, along with behavioral trends like a focus on sustainability and security will define trends in the evolution of smart homes, both in 2025 and in the future. If you’re an investor looking to make the most of 2025, we strongly recommend reading our guide to positioning your prosperity in the real estate market.