It’s no secret that the housing market has experienced unprecedented highs and lows since the pandemic. To prepare for these constant changes, real estate experts monitor the industry to predict the next big trends for homebuyers.
“Given the anticipated economic trends—high interest rates, slower market activity, and price stabilization—buyers can take advantage of opportunities with a well-considered approach,” says Jon Howard, mortgage loan originator at Lucid Lending. “With a patient approach, buyers can leverage the slower pace and increased inventory to find properties that align with their budgets and priorities.”
In this article, we’ll examine the emerging trends experts anticipate will affect homebuyers in 2025.
- Jon Howard is a mortgage loan originator at Lucid Lending, a mortgage broker.
- Bryson Taggart is a senior business development manager at Opendoor, an online real estate company.
- Danielle Hale is the chief economist at Realtor.com, a real estate listing website.
- Michael Gifford is the CEO of Splitero, a home equity investment business.
1. Longer Time on the Market
One of the biggest concerns for many buyers in recent years has been the rapid speed at which newly listed homes sell. Post-pandemic, the market favored buyers who could easily give cash offers or offers well over the asking price in the immediate days after listing. Now, real estate experts say homes will likely sit on the market a little longer because inventory is projected to increase.
“Over the past couple of years, inventory has been extremely tight, driving rapid sales. However, as the market adjusts, inventory is expected to rise slightly in 2025,” Howard says. “More inventory provides buyers with more choices, which can reduce urgency and lengthen the time properties spend on the market.”
Still, homes that are considered highly desirable will always sell more quickly.
“As more homes come into the market, sellers will need to be smart about pricing and presentation. Homes that are priced right, well-maintained, and have features buyers are looking for—like updated kitchens or outdoor spaces—will likely sell quickly,” says Bryson Taggart, senior business development manager at Opendoor. “On the other hand, homes that need more work or aren’t priced to match market conditions might sit a bit longer.”
2. Decrease in Home Prices
Home prices surged to record levels in recent years, but many real estate experts predict a correction for more reasonably priced properties.
“In 2025, we’re likely to see a decrease in the percentage of homes selling above asking price compared to the past few years when bidding wars and limited inventory were common,” Howard says. “The trend of homes selling above asking is expected to moderate for many of the same reasons we believe homes will not be selling as quickly overall in 2025.”
Still, Howard believes that certain homes in high demand will get offers above asking, especially those that are move-in ready in prized neighborhoods.
3. High Demand for Move-In Ready Homes
First-time homebuyers who were able to enter the market in recent years despite record-high prices and interest rates found themselves buying a different type of home than past buyers. Many millennials, for example, hoped to buy affordable starter homes but paid top dollar for houses in need of lots of repairs and updates. A majority of buyers decided they’d rather tackle a few renovation projects in a less-than-ideal house to stay within their budget. These days, the trend is shifting.
“In 2025, we’re likely to see the highest demand for move-in ready homes, though multifamily and affordable housing options will also gain traction,” Howard says. Multifamily homes will garner appeal given they’re more affordable and offer the option of multigenerational living. They’re also ideal as income properties, which could appeal to some buyers. High interest rates mean many buyers have less cash to make renovations with, meaning turnkey homes will be more popular overall.
Howard also believes that fixer-uppers will maintain their niche appeal to a particular set of buyers looking to invest and DIY their own renovations in favor of saving money.
“The overarching theme is affordability and convenience,” he explains. “Higher mortgage rates and ongoing inventory challenges make move-in ready homes the most appealing choice for a broad base, while multifamily or flexible properties offer valuable alternatives.”
A Desire for Low-Maintenance Homes
In addition, Howard points out that millennials will look for low-maintenance homes, especially with the continuation of remote work. He says that many buyers want houses that already have home offices set up.
“Many in the millennial generation, the largest cohort of homebuyers, are in their prime purchasing years,” he says. “Studies show they tend to prioritize convenience and lifestyle, leading them to prefer move-in ready homes that align with busy work schedules and family commitments.”
Taggart agrees, citing survey data on the topic which shows that nearly 70% of buyers want a turnkey home now.
“Our data shows this preference is particularly strong among the 26% of ‘anytime buyers’ who aren’t swayed by seasonality and are looking for homes that meet their needs year-round,” Taggart explains. “These buyers tend to favor homes that offer practicality, long-term value, and features like low-maintenance, energy-efficient upgrades, which will likely drive demand in 2025.”
4. More Economic Uncertainty
While the 2024 presidential election might be in the rearview, many experts are unsure what could unfold as the new administration begins.
“Concerns over inflation and economic uncertainty make buyers more cautious, leading to a more measured approach in the home-buying process,” Howard says. “Buyers may take longer to make decisions, leading to longer sale cycles.”
Yet even with uncertainty on the horizon, some buyers might feel spurred into action.
“Data shows nearly 70% of consumers are more likely to buy or sell in the next six months, showing that buyers still plan to act despite a fluctuating economy,” Taggart explains. “Additionally, with nearly 60% of buyers and sellers expecting home prices to rise, it’s an important time for potential buyers to consider entering the market before prices climb further.”
5. Potential for Decreased Interest Rates
Danielle Hale, chief economist at Realtor.com, says as the market balances on several fronts, interest rates are also seeing a correction, which means buying a home might become a little more affordable.
“Despite their recent climb, interest rates are expected to trend gradually lower in 2025 as inflation continues to wane,” Hale says. “That said, rent prices are expected to drop slightly in 2025, which means that many households on the cusp of buying might choose to continue to rent. As a result, the Realtor.com forecast expects homeownership to drop slightly in 2025.”
Michael Gifford, CEO of Splitero, says dropping interest rates could mean some current homeowners enter the market again or continue waiting for an even bigger drop.
“The Federal Reserve is signaling interest rates dropping, which seems promising for those considering buying, refinancing, or accessing their home equity. But with essentials like food and gas costs still high, that relief may feel minimal, especially for those with low-rate mortgages in the 2.50%—4.00% range,” he says.
Advice for Buyers
If you plan to buy a home in the coming year, Hale suggests looking in the spring.
“Spring is usually the sweet spot for sellers as buyer interest is usually higher earlier in the new year and wanes as consumers find homes to buy or choose to continue renting,” she explains. “Fall usually offers buyers more market power, and as a result, flexible buyers can typically score a better deal later in the year. However, while this challenge will get easier as inventory climbs in 2025, a top concern will likely continue to be finding the home that is a good fit and also on budget.”
Because there are so many factors at play, Hale suggests making a list of must-haves and nice-to-haves to help narrow buyers’ search and be prepared to jump on the right home no matter the season. She says that buyers shouldn’t let market conditions dictate when or whether they decide to buy.
Each Buying Situation Is Unique
Gifford advises buyers to evaluate what makes sense financially before deciding if they should purchase a specific home or not.
“Buying a house depends on your financial situation and your wants and needs. Many people choose to buy a house because they’re in a certain situation that warrants extra space, a relocation, or a better lifestyle,” Gifford says. “Timing in any market is difficult, and real estate is not easily replaced. If buyers find a house that meets their needs and is in their desired location, waiting to purchase that property is a gamble.”
