Should You Buy a Home in 2025? 10 Expert Tips to Help You Decide
this Prospects of home ownership Over the past few years, it feels more and more out of reach. Potential buyers face multiple obstacles: soaring Mortgage Ratestubborn housing prices and scarce available homes for sale. Finally will be 2025 Bring some relief?
Housing affordability is unlikely to improve significantly this year, but there are hope and promising reasons. Although each local market faces different challenges, experts predict Inventory level and housing prices.
“Overall, buyers can expect a highly competitive market, but offer slightly higher opportunities than they have offered in recent years.” Jeb Smitha licensed real estate agent and a member of the expert review board of CNET Money
That said, the next few months were full of uncertainty. Trump administration’s economic policies will affect Fed’s currency decisionmortgage rates, construction prices, real estate development and homebuyer sentiment.
We discussed with several experts about their housing market forecasts and how home buyers should prepare. That’s what they have to say.
1. Follow what the housing market experts say
Real estate trends are dynamic and are often difficult to understand, especially when tracking mortgage movements. That’s why housing market experts and economists have always reviewed macroeconomic data to better understand where things are going.
To be a smarter buyer, keep an eye on market watchers reading newsletters or listening to podcasts. Here are some of the experts I follow, and the podcasts I listen to can help me stay in the loop.
2. Watch mortgage interest rate trends
While mortgage rates are volatile and fluctuating every day, experts expect any dramatic drop in borrowing costs this year. Central banks expect less interest rates to be lowered as inflation may remain higher, which makes The pressure on the mortgage market.
Most forecasts require an average 30-year fixed mortgage interest rate It remained above 6.5% in the first half of 2025 and fell to 6% by the end of the year.
The average interest rate reflects the content of the lender’s advertisement, but there is How to get lower personal interest rates Take a home loan. Looking for different loan terms, negotiating with your broker or trying other options such as buying a mortgage point and Reduce your fees.
“While rates are unlikely to return to record lows in the past, even modest reductions can make monthly payments easier to manage for buyers,” Smith said.
make sure Lower rate From the beginning, even reaching a tenth of a percentage point can save you tens of thousands of dollars in interest throughout the loan process.
3. Create a home purchase budget
If you haven’t already, start budgeting for advance payments and other expenses related to buying a home, such as closing costs, home insurance premiums, and property taxes.
Although Minimum down payment requirement Most lenders make up 3% of traditional loans, and experts usually recommend a larger down payment. If you drop 20% of the property’s asking price, you can take out a smaller loan (meaning less debt) and avoid paying Private mortgage insurance.
When creating a budget, make sure you can pay monthly mortgage payments and provide other ongoing expenses and bills, including debts like student loans and credit card balances.
CNET Mortgage Calculator You can help you solve these numbers by entering your credit score, estimated down payments and interest rates.
4. Be flexible
exist Competitive marketit is almost impossible to find a property that meets all your needs and Suitable for your budget. For example, the location of the home might be great, but there is no large backyard. Consider whether the trade-off is worth it.
“Focus on your ‘non-call’, such as location or commuting hours, but willing to compromise within a square footage or cosmetics such as a square,” Smith said.
If you have the time and financial ability to do repairs or upgrades, consider a repairer, say Erin Sykesfounder of real estate company Sykes Properties. Older homes or homes that need renovation tend to have a lower price tag. “The most unnegotiable homes are those that are ready,” Sykes said.
Staying flexible on deadlines is another way to make your offer more attractive, Sykes said.
5. Lead in the game
Many are Wait for mortgage rates to relax Before committing ownership of the house. While it may be blocked until you get the lowest interest rate, remember that house prices are expected to continue to rise. Once mortgage rates start to decline, curbing demand for home purchases will lead to increased competition and even higher prices.
If this makes sense for your budget, buy a home as soon as possible instead of giving you more negotiation capabilities.
“Think about buying now and refinancing later (if the price drops), but don’t extend yourself to pursue a slightly lower speed,” Smith said.
6. Consider a new home building
Limited resale inventory is directly related to high mortgage rates. Most homeowners are currently reluctant to give up mortgage rates below 6% (including 4% below 4%), which leads to an under-list of active homes.
However, new buildings may Strengthen housing supply. Brand new home sales account for more than 30% of the single-family residential market in 2024, compared with about 10% to 12% in the past few years.
If supply in your area is restricted, consider buying a new building, which may offer a more modest price tag, with less hassle to bid. To inspire buyers, many homebuilders have been offering Discounts and prices to buy.
7. Interview with multiple real estate agents
The right real estate agent can make a big difference in your home buying journey. You want someone with good communication skills, connections and experience, but most importantly, an agent with a deep understanding of a specific market that can help you develop the right approach. Joseph Castillo Compass Real Estate.
Agents familiar with your area can tell you how realistic your budget is and can even point you to more affordable neighborhoods. Contact several local real estate agents first to discuss your needs and concerns before resolving them.
8. Explore low-cost loan options
If the upfront cost of home ownership continues to be a barrier, check if you are eligible for a government-supported loan, grant, or down payment assistance program.
FHA Loan,,,,, VA Loan and USDA loan More than traditional loans tend to have lower credit scores and down payment requirements. States also provide different types of housing assistance through grants or interest-free loans. Check with your State or local housing administrationa real estate agent or lender to find out what you are eligible for.
Read more: These 8 first-time homebuyer plans can save you money on mortgage loans
9. Around shopping mortgage lenders
Whatever happens in the market, mortgage rates and fees vary widely Mortgage lenderso you should always be walking around. Experts recommend getting at least three loan estimates from different lenders to compare the cost of borrowing and potential loan costs Negotiate lower mortgage rates or better loan terms.
Researching and comparing quotes from multiple lenders will not only save you money, but will also help you find someone who is aligned with your financial situation and goals.
“While interest rates are important, they are not everything. Working with reputable lenders, they can help you find a loan product that suits your long-term financial goals,” Smith said.
10. Ready to wait
If 2025 is not the right year to buy a house, that doesn’t matter. When you are ready, there are many things you can do to put yourself in a better position.
Improve credit score. your Credit Score One of the main factors a lender should consider when determining whether you are eligible for a mortgage and at what interest rate. The minimum credit score for regular loans starts at 620.
Pay off debts. The lender also considers your debt-to-income ratio or DTI. Paying down debt will lower your DTI, which means you will be able to borrow more at a higher price. As an additional bonus, it can also reduce the significant financial burden and provide you with more room to save on long-term goals, such as your down payment.
Save down payment. It may take a long time Save enough cash to make a down paymentbut you can start with weekly or monthly savings goals. Consider storing cash in High yield savings account or Certificate of deposit (If you do not plan to buy in the near future) to take advantage of compound interest.
Is it worth buying a home in 2025?
Experts are cautiously optimistic about the housing market in 2025, although it will take time to resolve the affordability crisis. Buying or waiting is a question that only you can answer. Instead of trying to time the market, pay attention to your personal situation.
“If you’re financially prepared and plan to stay at home long enough to make it worth investing, now is a good time,” Smith said. “In the long run, trying to wait for a lower price or interest rate may be It will cost you because neither is predictable.”
