It's no secret that the real estate market has experienced unprecedented ups and downs since the pandemic. To prepare for these constant changes, real estate experts are watching the industry to predict the next big trends for homebuyers.
“Given expected economic trends – high interest rates, slower market activity and price stabilization – buyers can take advantage of opportunities with a thoughtful approach,” says Jon Howard, mortgage lender at Lucid Lending. “With a patient approach, buyers can take advantage of the slower pace and increased inventory to find properties that fit their budgets and priorities.”
In this article, we examine the emerging trends that experts expect to impact homebuyers in 2025.
- Jon Howard is a mortgage originator with Lucid Lending, a mortgage broker.
- Bryson Taggart is a senior business development manager at Opendoor, an online real estate company.
- Danielle Hale is chief economist at Realtor.com, a real estate listing website.
- Michael Gifford is the CEO of Splitero, a home equity investment company.
1. Longer time on the market
One of the biggest concerns for many buyers in recent years has been the rapid rate at which newly listed homes are selling. Post-pandemic, the market favored buyers who could easily make cash offers or offers well above the asking price in the immediate days following the listing. Now, real estate experts say homes are likely to stay on the market for a little longer as inventory is expected to increase.
“Inventory has been extremely tight in recent years, resulting in rapid sales. However, as the market adjusts, inventory levels are expected to increase slightly in 2025,” says Howard. “More inventory gives buyers more choices, which can reduce urgency and extend the time properties stay on the market.”
Still, homes that are considered highly desirable are selling at an ever-increasing rate.
“As more homes come onto the market, sellers 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 — are likely to sell quickly,” says Bryson Taggart, senior business development manager at Opendoor. “On the other hand, homes that need more work or are not priced in line with market conditions could sit a little longer.”
2. Decline in real estate prices
Real estate prices have risen to record levels in recent years, but many real estate experts are predicting a correction for cheaper properties.
“In 2025, we will likely see a decline in the percentage of homes selling above asking price compared to recent years when bidding wars and limited inventory were common,” Howard says. “The trend of homes selling above asking is expected to moderate for the same reasons we believe homes will not sell as quickly overall in 2025.”
Still, Howard believes certain high-demand homes will receive above-average offers, particularly those that are move-in ready in desirable 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 bought a different type of home than previous buyers. For example, many Millennials hoped to purchase affordable entry-level homes, but paid top dollar for homes that needed a lot of repairs and upgrades. The majority of buyers decided they would rather tackle a few renovation projects on a less-than-ideal home to stay within their budget. Nowadays the trend is changing.
“In 2025, we will likely see the greatest demand for move-in-ready homes, but multifamily and affordable housing options will also become more important,” says Howard. Multi-family homes are becoming more attractive because they are more affordable and offer the possibility of multi-generational living. They are also ideal as investment properties, which may be attractive to some buyers. High interest rates mean that many buyers have less money available for renovations, making turnkey homes more popular overall.
Howard also believes fixer-uppers will maintain their niche appeal to a specific group of buyers who want to invest and do their own renovations to save money.
“The overarching theme is affordability and convenience,” he explains. “Higher mortgage rates and ongoing inventory issues make move-in ready homes the most attractive choice for a broad base, while multifamily or flexible properties offer valuable alternatives.”
The desire for low-maintenance homes
Additionally, Howard points out that Millennials will be looking for low-maintenance homes, especially as remote work continues. He says many buyers want homes that already have home offices set up.
“Many in the Millennial generation, the largest cohort of homebuyers, are in their prime buying years,” he says. “Studies show they tend to prioritize convenience and lifestyle, leading them to prefer move-in-ready homes that balance busy work schedules and family commitments.”
Taggart agrees, citing survey data on the topic that shows nearly 70% of buyers now want a turnkey home.
“Our data shows that this preference is particularly strong among the 26% of 'all-time buyers' who are unaffected by the season and are looking for homes that meet their needs year-round,” explains Taggart. “These buyers typically prefer homes that are practical, offer long-term value and have features such as low-maintenance and energy-efficient upgrades, which will likely drive demand in 2025.”
4. More economic uncertainty
While the 2024 presidential election may be fading into the background, many experts are unsure about what could unfold as the new administration begins.
“Concerns about inflation and economic uncertainty are making buyers more cautious, leading to a more measured approach to the homebuying process,” says Howard. “Buyers may take longer to make decisions, resulting in longer sales cycles.”
But even as uncertainty looms, some buyers may feel spurred to action.
“Data shows that almost 70% of consumers are more likely to buy or sell in the next six months, showing that despite a volatile economy, buyers still plan to act,” explains Taggart. “In addition, with almost 60% of buyers and sellers expecting property prices to rise, it is an important time for potential buyers to consider entering the market before prices rise further.”
5. Potential for lower interest rates
Danielle Hale, chief economist at Realtor.com, says as the market balances on multiple fronts, interest rates are also seeing a correction, meaning buying a home may become a little more affordable.
“Despite their recent increase, interest rates are expected to gradually decline in 2025 as inflation continues to ease,” Hale says. “Still, rental prices are expected to fall slightly in 2025, meaning many households on the verge of buying could choose to continue renting. Therefore, Realtor.com forecasts that home ownership rates will decline slightly in 2025.”
Splitero CEO Michael Gifford says a drop in interest rates could cause some current homeowners to re-enter the market or continue to wait for an even bigger drop.
“The Federal Reserve is signaling falling interest rates, which appears promising for those thinking about buying, refinancing or accessing home equity. But with the cost of essentials like food and gas still high, this relief could feel minimal, especially for those with low mortgage rates in the 2.50% to 4.00% range,” he says.
Advice for buyers
If you're planning on buying a home in the coming year, Hale recommends looking in the spring.
“Spring is typically the best bet for sellers because buyer interest is typically higher at the start of the new year and wanes as consumers find homes to purchase or decide to continue renting,” she explains. “Fall typically offers buyers more market power, so flexible buyers can typically get a better deal later in the year.” While this challenge will become easier as inventory increases in 2025, finding a home will likely continue to be a primary concern , which fits well and is also within the budget.”
With so many factors at play, Hale suggests creating a list of “must-haves” and “nice-to-haves” to help narrow down buyers' searches and be prepared to find the right home, no matter the season to find. She says buyers shouldn't let market conditions dictate when or whether they decide to buy.
Every buying situation is unique
Gifford advises buyers to consider what makes financial sense before deciding whether or not they should purchase a particular home.
“Buying a home depends on your financial situation and your wants and needs. “Many people decide to buy a home because they find themselves in a specific situation that requires more space, a move or a better lifestyle,” says Gifford. “Getting the timing right is difficult in any market and real estate is not easy to replace. “If buyers find a home that meets their needs and is in the location they want, waiting to purchase that property is a gamble.”