The Housing Trend That's Great News For Anyone Buying In 2025

New year, new you. New house? From understanding down payments and mortgage terms to deciding between a fixer-upper or move-in-ready place, navigating the entire home buying process can be a real challenge. After home prices soared during the pandemic and then cooled slightly during 2024, buyers and sellers alike face uncertainty about the ideal moment to make a move. Headlines have recently featured analysts mentioning "market corrections" in both directions. However, if you've been waiting for the perfect time to finally invest in a new home, stabilizing prices and higher inventory are two important real estate trends that are great news for anyone buying in 2025.

Cooling prices and more options aren't the only reasons to get serious about buying a home. Despite the Federal Reserve cutting interest rates three times in 2024, mortgage rates remained stable in the mid-6% to 7% range, where they remain as of this writing. However, several major real estate institutions predict that mortgage rates will significantly decrease in 2025. Future rate cuts may motivate sellers who were previously reluctant to give up their mortgage rates, and this would put buyers back in the driver's seat.

Home prices skyrocketed during the pandemic, and for many years the trend showed no signs of stopping. However, it is finally starting to plateau, and between 2025 and 2029, forecasters say pricing will only rise at around a percentage point above the inflation rate. That's good news for buyers who want to get a great deal. As the economy continues its post-pandemic recovery, and the Trump administration pursues a stated agenda of deregulation and business-friendly policies, experts are cautiously optimistic that now is a good time to buy or sell a home. "The size and direction of a 'Trump bump' will depend on what campaign proposals ultimately become policy and when," said Realtor.com Chief Economist Danielle Hale in a recent analysis. "For now, we expect a gradual improvement." 

As we head into 2025, larger builders will likely continue striving to meet the demand for new single-family homes. Buyers can expect to be enticed with generous incentives like contributions to closing costs and additional allowances for design upgrades. And, although the demand for housing still far outstrips the supply of homes for sale, existing homeowners are starting to recognize and respond to important post-pandemic shifts by listing their properties for more competitive prices. Those who purchased at the height of the market may have bought more house than they needed or could afford. Many employers are requiring workers to return to the office, making relocation a necessity for some sellers. Unforeseen major life events can also signal that it's time to sell a home.

Buyers can also benefit from the increase in available inventory. The number of homes for sale is consistently rising. Unlike during the pandemic-era climate, where frenzied buyers had to engage in bidding wars and waive contingencies on homes they may not even have seen in person, homes today are sitting on the market for longer. According to CNBC, a recent Redfin report indicated that over half of all homes for sale were listed for 60 days or more. "I explain to sellers that their house will sit on the market if it's not fairly priced," said Redfin agent Meme Loggins, whose remarks were featured in the report. "Homes that are priced well and in good condition are flying off the market in three to five days, but homes that are overpriced can sit for over three months."

More homes for sale means that sellers, whether builders or homeowners, have to compete for buyers instead of the other way around. Combined with more affordable mortgage rates, this puts anyone buying a home in 2025 in a powerful position. There are many important factors to identify before buying a home, as it's one of the most expensive purchases most of us will ever make. If you're ready to make a move, though, remember that you no longer have to rush your decision because it's becoming safe to say we're heading into a buyer's market.