2025 Real Estate Market Guide: What Every Homebuyer and Seller Should Know

Interest Rates & Inventory Levels:

Forecasts suggest that mortgage interest rates will remain elevated compared to pre-pandemic levels. For instance, the Mortgage Reports anticipates that 30-year fixed-rate mortgages will hover around 6% throughout 2025. Similarly, Forbes reports that some experts predict rates could remain well above 6% through mid-2025. These sustained higher rates may continue to impact affordability for many buyers.

The housing market is projected to see modest improvements in inventory. Zillow forecasts 4.3 million sales of existing homes in 2025, up slightly from the 4 million expected in 2024, indicating a gradual increase in available properties.However, inventory levels may still be below historical averages, maintaining a competitive environment for buyers.

What That Means for Buyers and Sellers:

• Moderate Price Appreciation: Given the combination of higher interest rates and ongoing affordability challenges, home price appreciation is expected to be moderate in 2025. Zillow projects a national home value growth of 2.6%, which is a softening that could be welcome news for financially stressed buyers.
• Market Variations: Markets with lower inventory levels may experience higher price appreciation due to increased competition among buyers. For example, certain Australian regions with critically low housing supply are expected to see over 10% capital growth in 2025.
• New Construction Opportunities: New construction is anticipated to play a role in easing inventory constraints. Builders plan to construct about 1.1 million homes in 2025, a 13.8% increase from 2024. This expansion may offer buyers more options and potentially less competitive environments, especially in areas experiencing significant growth.

1. Work with a Knowledgeable Agent

Navigating the real estate market requires partnering with the right agent. The industry includes a wide range of professionals, from part-time agents to full-time experts. With low barriers to entry, it can be difficult to discern which agents have the experience and dedication needed to best serve clients. Many agents may lack the market expertise or commitment to act in their clients’ best interests.

This is where HowToHouse can help. We connect buyers and sellers with pre-vetted, top-performing agents who have demonstrated deep market knowledge and a proven track record of client success. We travel the country interviewing lends, escrow officers, and designated brokers – to find the best of the best. Working with a skilled agent can make all the difference in navigating complex transactions and ensuring a smooth, stress-free experience.

Simply take the quiz (it’s free!) and receive instant top agent matches in your city. Don’t see your city yet, or have a very specific situation? Message our team instead, and we will give you a customized recommendations catered your specific needs within 24 hours!

2. Get Pre-Approved Early

In a competitive market, having your financing in order is essential. A mortgage pre-approval not only helps you understand your budget but also signals to sellers that you’re a serious buyer. Work with a lender to secure pre-approval before you start shopping for a home.

We recommend asking your real estate agent for lender recommendations, they will have a handful of trusted lenders they have previously worked with. Remember, your lender and your real estate agent work together as a team.

3. Be Prepared to Act Quickly

In competitive markets, homes can go under contract within days, even within 24 hours! To stay ahead:

• Monitor new listings daily.
• Tour homes as soon as possible. Your agent should be getting you in to see a home same day!
• Make strong, well-informed offers.
• Start window shopping and touring homes before you’re ready to buy. This helps you refine your preferences and know exactly what you want when it’s time to act. Being prepared allows you to move quickly when the right opportunity arises.

4. Consider New Construction

With inventory still limited in many areas, new construction can be an attractive option. Builders are offering more incentives in 2025, such as rate buydowns or upgrades, to attract buyers. However, be sure to:

• Research the builder’s reputation.
• Understand timelines and potential delays.
• Factor in costs for landscaping, window coverings, appliances that are not included, and other post-closing expenses.

5. Understand Timing Of The Market

The selling season lasts from early January to late May. This is when the most buyers are out looking for homes, and the most amount of sellers put their home on the market. There are pros and cons to each season, they may affect what time of the year it makes sense for you to buy in.

Timing the market can be a complex decision, but understanding historical trends can help guide your strategy. For example, home prices historically peak in May, making it the best time for sellers to fetch top dollar. However, for buyers, this can mean paying a premium due to increased competition. So, why might you still consider buying in May? It depends on your goals. If you’re searching for your “forever home,” the one you’ll settle into for many years, prioritizing the right property over short-term market timing could be worth the extra cost. Finding the perfect home during a peak month may provide long-term satisfaction that outweighs the upfront expense. On the other hand, if you’re looking for a starter home or an investment property you plan to keep for only 3-5 years, it might make sense to focus on timing. Buying during slower months like November, when prices typically dip and negotiations are more favorable, could save you money and increase your return on investment in the short term.

6. Adapt Your Strategy for Selling

If you’re selling in 2025, focus on:

• Pricing Smartly: Overpricing can deter buyers, while competitive pricing can drive multiple offers.
• Staging: Present your home in its best light to attract interest.
• Marketing: Use high-quality photos, videos, and virtual tours to reach a wider audience.

7. Stay Flexible and Patient

The 2025 market is competitive, and transactions may take longer than expected. Being flexible with your timeline and patient during negotiations can help reduce stress and increase the likelihood of a successful outcome.

Final Thoughts

Navigating the 2025 real estate market requires preparation, flexibility, and the right team. By staying informed and proactive, you can achieve your real estate goals, whether you’re buying your dream home, selling your current property, or making an investment. Remember, a trusted real estate agent can be your greatest ally in this journey. The the quiz today to find your perfect match!