Rising inventory and persistent high rates create complex landscape for prospective homebuyers
The American housing market in 2025 presents a mixed bag of opportunities and challenges for potential buyers, with real estate agents offering nuanced guidance based on economic realities rather than the traditional “buy now” mentality.
“The prospect of elevated mortgage rates throughout 2025 suggests that housing market activity will continue to be challenged,” says Selma Hepp, chief economist for real estate data firm Cotality. The combination of high mortgage rates hovering near 6.9% and steep home prices has created what many industry professionals describe as a “new normal” that buyers must either accept or continue waiting on the sidelines.
For those who have postponed purchases hoping for more favorable conditions, real estate agents are increasingly advising a personalized approach rather than timing the market. The days of blanket “buy now” recommendations appear to be waning as agents adopt more measured counsel based on individual financial circumstances.
“If you’re financially ready—your credit score is high, your income is solid and you have cash for a down payment—there’s no reason to wait,” according to a recent Bankrate analysis. This perspective acknowledges that while market conditions remain challenging, personal financial readiness should drive buying decisions more than market forecasts.
A bright spot for buyers is the notable increase in housing inventory, with available homes for sale up by more than 32% compared to last year, according to recent data from Realtor.com. While still below pre-pandemic levels, this trend represents meaningful improvement for frustrated buyers who have faced limited options.
The decision to buy now also comes with strategic considerations around potential future rate improvements. Many real estate professionals suggest that buyers who find the right property should consider purchasing with plans to refinance if rates eventually decrease.
Lawrence Yun, chief economist of the National Association of REALTORS®, has projected a somewhat improved outlook for 2025 and 2026, forecasting “higher home sales and moderating mortgage rates.” This cautious optimism comes after two particularly difficult years in the housing market.
The Trump administration’s proposed tariffs add another layer of complexity to housing market forecasts. Experts project new home prices may increase 4-6% by year’s end as import duties raise costs for lumber, drywall, steel, and appliances—potentially making the case for buying sooner rather than later for those considering new construction.
For buyers in 2025, agents recommend increased diligence in identifying value opportunities. “Look for homes with price reductions where you want to live,” advises one expert. “Some apps, like Realtor.com and Trulia, will trigger an alert for sales price adjustments on homes you’re interested in. Then, negotiate even harder.”
Regional variations further complicate the national picture. A recent survey of real estate agents revealed a nearly even split between those who believe we’re in a buyer’s market (45%) versus a seller’s market (41%)—suggesting a more balanced environment overall but with significant local differences.
The Midwest and parts of the Southwest generally offer more neutral conditions for negotiations, while seller’s markets persist in major coastal cities. Parts of the Southeast show emerging buyer’s market conditions that might benefit first-time homebuyers seeking negotiating leverage.
Despite challenging conditions, a surprisingly optimistic outlook prevails among many real estate professionals. A Zillow survey of over 300 agents found that 72% predict increased home sales transactions in 2025, with 22% expecting a large increase—even as home prices continue their upward trajectory.
For buyers weighing their options in this complex landscape, the consensus advice from agents emphasizes personal financial readiness over market conditions. “To answer the question of whether it’s a good time to buy a house for you personally, you must look beyond broad market forces,” notes one analysis. “Buying a home is more than considering macroeconomic factors. It’s an important life decision based on your personal and financial situation.”
