Predicted Home Purchasing Trends to Dominate in 2025
The real estate sector has seen its fair share of extreme highs and lows following the pandemic. To navigate these erratic shifts, industry professionals keep a close eye on market trends to forecast the upcoming preferences for homebuyers.
According to mortgage loan originator Jon Howard from Lucid Lending, the anticipated economic factors — namely high-interest rates, slowed market activity, and stabilized pricing — create openings for diligent buyers. By adopting a measured strategy, consumers can make the most of the diminished competition and increased inventory to find properties that match their financial plans and preferences.
In this piece, we'll delve into the foreseeable trends that industry experts predict will affect homebuyers in 2025.
- Jon Howard, a mortgage loan originator at Lucid Lending, specializes in mortgage financing.
- Bryson Taggart serves as a senior business development manager at Opendoor, an online real estate platform.
- Danielle Hale acts as the chief economist at Realtor.com, a well-known real estate listing website.
- Michael Gifford holds the position of CEO at Splitero, a home equity investment company.
1. Extended Listing Periods
Swift property transactions have been a significant concern for many buyers in recent times. In the post-pandemic market, the advantage went to those capable of submitting instant cash offers or prices significantly above the asking price shortly after listing. Presently, real estate analysts postulate that homes will spend a longer time on the market due to the predicted increase in inventory.
“Inventory has been exceptionally scarce for the past couple of years, leading to swift sales. Nevertheless, as the market adapts, inventory is projected to rise mildly in 2025,” Howard explains. “The increased availability of options allows buyers more choices, thereby reducing urgency and prolonging the time properties stay on the market.”
Although highly sought-after homes will continue to sell swiftly, other properties may linger.
“As more properties enter the market, vendors will need to employ smart pricing and presentation tactics. Property that is priced accurately, well-maintained, and showcases features in demand, such as renovated kitchens or outdoor spaces, is likely to sell promptly,” Bryson Taggart, senior business development manager at Opendoor, articulates. “On the other hand, homes needing repairs or not priced in accordance with market conditions might remain on the market for a while longer.”
2. Declining Home Prices
Property prices reached record heights during the past few years, but numerous real estate experts estimate a reduction in overvalued homes.
“In 2025, we're likely to witness a decrease in the percentage of homes selling above asking price compared to the past few years, which were characterized by heated bidding wars and limited availability," Howard acknowledges. "The trend of homes selling above asking is expected to moderate for the same reasons we foresee homes will not be selling as quickly in total in 2025.”
However, Howard maintains that some highly sought-after properties in high-demand areas may still attract offers above asking, particularly move-in-ready houses in sought-after neighborhoods.
3. Demand for Move-In-Ready Homes
First-time homebuyers who managed to enter the market despite exorbitant prices and high interest rates in the recent past ended up purchasing different types of homes. For instance, many millennials aspired to buy reasonably-priced starter homes but paid top dollar for fixer-upper properties. The majority of homebuyers decided it was more practical to undertake renovation projects on subpar homes to stay within their budgets. Today, this trend is shifting.
“In 2025, we're likely to see the highest demand for move-in-ready homes, while multifamily and affordable housing options will also gain traction,” Howard proclaims. “Multifamily homes will attract interest due to their affordability and the possibility of multigenerational living. They're also suitable as income properties, which could appeal to some buyers."
Scattered fixer-uppers will retain their niche appeal to buyers who prioritize investment and DIY renovations in order to save money.
“The major theme revolves around affordability and convenience,” Howard elaborates. “Higher mortgage rates and ongoing inventory challenges render move-in-ready homes the most attractive choice for a broad base. Meanwhile, multifamily or flexible properties provide valuable options.”
Preference for Low-Maintenance Homes
Additionally, Howard highlights that millennials will gravitate towards low-maintenance homes, with the continued expansion in remote work. He points out that many buyers are seeking homes equipped with pre-installed home offices.
“The millennial generation, the largest cohort of homebuyers, is in their primary purchasing years,” Howard explains. “Studies indicate they tend to prioritize convenience and lifestyle, which prompts them to favor move-in-ready homes that fit with busy work schedules and family commitments.”
Taggart asserts the same, referencing survey data that reveals nearly 70% of buyers desire a ready-to-move-in home straight away.
“Our data indicates this preference is particularly pronounced among the 26% of ‘anytime buyers’ who are not swayed by seasonality and are seeking homes that meet their needs year-round,” Taggart concludes. “These buyers tend to favor homes that offer practicality, lasting value, and features, such as low-maintenance and energy-efficient upgrades, which are likely to drive demand in 2025.”
"Worries about inflation and financial instability make shoppers more cautious, causing them to adopt a more careful strategy during the property purchasing process," Howard shares. "Shoppers might take more time to make decisions, resulting in longer sale durations."
However, some buyers might feel prompted to act despite the instability ahead.
"Data shows that around 70% of consumers are more likely to buy or sell within the next six months, indicating that buyers are still intent on taking action despite an uncertain economy," Taggart explains. "Additionally, with around 60% of buyers and sellers anticipating property prices to increase, it's a critical moment for prospective buyers to consider joining the market before prices surge further."
Potential for Lower Interest Rates
Danielle Hale, chief economist at Realtor.com, explains that as the market finds equilibrium on various fronts, interest rates are also undergoing adjustments, making owning a home a bit more economical.
"Although they have risen, interest rates are predicted to decrease gradually in 2025 as inflation declines," Hale says. "However, rental prices are expected to drop slightly in 2025, meaning that households on the brink of buying might choose to continue renting instead."
Michael Gifford, CEO of Splitero, adds that falling interest rates could motivate current homeowners to enter the market again or wait for even lower rates.
"The Federal Reserve is indicating a drop in interest rates, which could be advantageous for those considering buying, refinancing, or accessing home equity," he states. "However, despite this, basic necessities like food and gas still remain expensive, which might lessen the relief for those with lower-interest mortgages (2.50% to 4.00%)."
Recommendations for Buyers
If you're planning to buy a home in the upcoming year, Hale suggests focusing on the spring season.
"Spring is typically the best period for sellers as shopper interest is usually higher earlier in the year, and wanes as consumers find homes to buy or opt to continue renting," she explains. "Autumn usually provides buyers with more market power, and flexible buyers can generally get a better deal later in the year. However, while this challenge will become less severe as inventory increases in 2025, finding a suitable and affordable home is likely to remain one of the most significant concerns."
Since there are numerous variables in play, Hale recommends creating a list of necessities and preferences to help narrow down the search and be ready to seize the perfect opportunity regardless of the season. She emphasizes that buyers shouldn't allow market conditions to determine when or if they choose to buy.
Each Purchasing Situation is Unique
Gifford advises buyers to evaluate whether purchasing a particular property aligns financially with their situation and needs before making a decision.
"Buying a house depends on your financial situation and your personal preferences, such as a job relocation or a better lifestyle," Gifford says. "Timing in any market is tricky, and real estate is not easily replicated. If buyers discover a house that satisfies their needs and is located in their desired area, waiting to purchase that property might be a gamble."
- Home Trends hint at a shift in the market, with homes spending longer on the market due to the projected increase in inventory, as explained by mortgage loan originator Jon Howard from Lucid Lending.
- News in the real estate sector suggests a potential decline in home prices, as many real estate experts anticipate a reduction in overvalued homes, according to Howard.
- In the coming years, Buying Your Home might see a surge in demand for move-in-ready homes, as first-time homebuyers are predicted to prioritize properties requiring minimal renovations, according to Howard and senior business development manager Bryson Taggart at Opendoor.
