As we approach 2025, the real estate market is poised for a mix of good and harsh news. Good news includes more properties for buyers to choose from, home prices not skyrocketing, and the potential for mortgage rates to drop. However, the harsh reality is that mortgage rates likely won’t decline significantly, limiting affordability for buyers and leading some homeowners to keep their properties off the market.
In the coming year, buyers are primarily concerned with finding a home they can afford, while sellers are faced with the challenge of navigating the changing market dynamics. Mortgage rates have been above 6.5% in recent years, with forecasters now predicting they will remain above 6% in 2025. While home prices are expected to rise, the increase may not be substantial, especially with mortgage rates above 6.25%.
The housing shortage that has been ongoing for nearly two decades may begin to ease as more homeowners are willing to sell now that they have adjusted to higher interest rates. Factors such as government policies and changes in commission rules for agents may also impact the market.
For sellers, effectively marketing their homes and demonstrating value is key, while buyers are advised to look for deal-breaking flaws before getting excited about a property’s features. Ultimately, both buyers and sellers are encouraged to take action rather than wait for ideal market conditions.
As we look ahead to 2025, the real estate market is evolving, and both buyers and sellers must be prepared to adapt to the changing landscape. It’s a new normal, and success in real estate will require diligence, flexibility, and a willingness to take action.
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