It’s a new year, which means it’s time to set goals and think ahead for what’s to come in 2025. For those considering a move, start setting realistic goals for a down payment and dreaming of a home’s must-haves. Forecasts look bright for 2025 and planning for a new home now can make the dream a reality later this year.
What to Expect in 2025
Real estate has seen its share of ups and downs the past few years. With higher interest rates and slightly less inventory, it’s been common to see homes sitting on the market longer than during COVID and immediately post-COVID. However, experts feel the new year will bring a change. According to the National Association of Realtors, home sales are expected to increase nine percent with new home sales estimated to grow more than 10 percent. To encourage this type of growth, it’s likely to see interest rates drop a little, but don’t expect the extremely low rates of a few years ago. These slight changes in mortgage rates will likely be enough to make homeownership a reality for many new buyers.
Regardless of current or future mortgage rates, it’s still important for buyers to secure pre-approval before diving into the real estate market. A pre-approval letter tells sellers that the buyer is serious about moving and tells the buyer how much house they can afford. The pre-approval process can take time due to the documentation lenders need, so make this step a priority if buying a house is in the future for 2025.
If mortgage rates come down later this year, as experts are forecasting, then it’s likely to see additional inventory on the market as homeowners prepare for their own move. New construction also plays a major role in inventory and while it may slow down during the winter months, look for new housing to increase once the weather starts to turn. All of this is good news for new buyers as it offers more options and possibly additional competition to keep prices manageable.
Recent years have seen home prices surge in some markets, but the new year should see home prices slowdown. While experts don’t agree on how much home prices will increase in 2025, the consensus from the National Association of Realtors and Sallie Mae, ranges from 1.8 to 3.5 percent. By comparison from 2023 to 2024, some areas saw home prices rise by more than six percent.
As with every new year, changes are coming and it’s best to be prepared if moving is a possibility this year. Speak with an experienced, local Realtor about buying or selling this year and take advantage of their expertise and knowledge of the market. Realtors are excellent sources of information about neighborhoods and trends and can offer insight into pricing and negotiations.