What You Need to Know if You’re Buying a House in 2025

Sarah Li Cain

Higher mortgage rates and low inventory have challenged buyers in recent years. This could change as the Fed is expected to continue cutting rates, gradually lowering mortgage costs.

While the market won’t be flooded with new listings or shift entirely to a buyer’s market, opportunities are improving. Here’s what buyers can expect in the coming months.

Mortgage Rates

The Fed’s 100 basis point cut since September could lead to lower mortgage rates in 2025, creating more opportunities for buyers. While another cut at January’s meeting is unlikely due to a strong December jobs report, future reductions remain on the horizon.

In 2024, 30-year fixed mortgage rates ranged from 6.08% to 7.22%. Experts anticipate up to four more Fed cuts in 2025, which could help ease borrowing costs. While the Fed has signaled a cautious approach, ongoing economic trends may still support lower rates, making homeownership more accessible.

Housing Supply

Fed rate cuts don’t directly lower mortgage rates, as factors like employment, inflation, and Treasury yields also play a role. However, if rates decline, buyers could see more affordable financing options.

While many homeowners are holding onto their properties due to past low mortgage rates, some may decide to sell as conditions shift. According to the CFPB, about 60% of mortgage holders have rates below 4%, but as affordability improves, more sellers could enter the market.

New home construction remains key to inventory growth. Though challenges like high building costs and labor shortages exist, efforts to streamline permitting and ease supply constraints could help expand options for buyers.

With home prices still high, affordability remains a challenge, but as mortgage rates trend downward, more buyers may find opportunities to enter the market.

The Bottom Line

While the housing market depends on factors like demand, mortgage rates, and supply, buyers could see more opportunities as conditions evolve. If you’re considering buying, now is a great time to prepare—check your credit score, determine your borrowing power, and start saving for a down payment. Being financially ready will put you in the best position to act when the right home and mortgage rate align.

Give me a call at 678-744-8070 and let’s discuss your options. 🙋‍♀️