Buying a House in 2025: Your How-To Guide
It won’t be impossible to buy a house in 2025 — just be prepared to play on hard mode.
According to a November 2024 report from ICE Mortgage Technology, the monthly principal and interest payment on an average-priced home is $2,385. While that’s not the highest it’s ever been, it’s still a sharp increase — nearly 80% — from just three years ago. In November 2021, when mortgage rates averaged 3%, the monthly principal and interest on an average-priced home was $1,327 per month.
Check the Forecast
Preparing to buy a house is a lot like dressing for the weather. It’s easier when the outlook is sunny — but with some planning, you can gear up to face any condition. Here’s what housing market experts are forecasting for the upcoming year.
Forecast Highlights
- Home prices: We’ll likely see more modest growth in 2025, a change from skyrocketing prices in recent years.
- Housing inventory: Demand still outpaces supply, but competition should be less cutthroat. Realtor.com forecasts a balanced market in 2025 with an average 4.1-month supply of homes for sale, up from an average 3.7-month supply so far in 2024.
- Mortgage rates: After topping 8% in October 2023, the 30-year mortgage rate has slowly eased into the 6.5%-7% range this year. Rate cuts from the Federal Reserve have helped nudge that downward. Despite earlier optimism, forecasters’ latest consensus is for rates to effectively plateau above 6% throughout 2025.
Set a Budget
National forecasts don’t analyze what matters most: Your personal cash flow. To get ready to buy, first meet with a financial advisor or use an online calculator to determine how much house you can afford. You can also get free or low-cost advice from a housing counselor sponsored by the U.S. Department of Housing and Urban Development (HUD).
Find a Buyer’s Agent
Your not-so-secret weapon for buying in 2025 just might be an experienced buyer’s agent.
Shop and Negotiate
Finally, it’s time to shop for a mortgage. To get the best interest rate, get a quote with at least three different lenders. You could also delegate the shopping to a mortgage broker, who can compare quotes and even negotiate a lower rate on your behalf.
Conclusion
While the 2025 housing market may be challenging, it’s not impossible to buy a house. With the right planning, budgeting, and strategy, you can navigate the market and find your dream home. Remember to set a budget, find a buyer’s agent, and shop for a mortgage to get the best possible deal.
Frequently Asked Questions
Q: Is it a good time to buy a house in 2025?
A: Yes, with the right preparation and strategy, it can be a good time to buy a house in 2025.
Q: How much house can I afford?
A: Use an online calculator or meet with a financial advisor to determine how much house you can afford.
Q: What’s the best way to find a buyer’s agent?
A: Look for an experienced agent who knows the local market and has a reputation for negotiating the best deals.
Q: How do I shop for a mortgage?
A: Get quotes from at least three different lenders, and consider working with a mortgage broker to compare rates and negotiate a lower rate on your behalf.
