Is 2025 a Good Time to Buy a Home?
This might be the best time in history to ask this question.
As we step into 2025, mortgage rates are more than double what they were three years ago, and home prices have only climbed higher. Naturally, buyers are wondering: Is now the right time to buy? Let’s break it down.
Just a quick reminder: These articles I share here are researched and written by me! As part of my commitment to ongoing support for my clients and partners, I write these articles to help them understand what’s really happening in the markets, beyond the headlines and soundbites.
Home Prices: Why Aren’t They Crashing?
The biggest difference between today’s market and 2008? Inventory.
Before the 2008 crash, the U.S. housing market had 4 million homes for sale. Today? 718,000. That’s a massive shortage, and it’s a key reason prices have stayed strong. (Source)
Another major factor: homeowner equity.
Homeowners today have a record $35 trillion in equity—more than double the amount before the 2008 crash. Back then, 26% of mortgages were seriously underwater (meaning homeowners owed more than their homes were worth). As of early 2024, that number is just 2.7%. (Source)
With limited inventory and strong homeowner equity, there’s no clear path for a major price crash.
Mortgage Rates: What to Expect in 2025
Rates have been on a wild ride, and that’s not likely to change soon. Projections suggest mortgage rates in 2025 will range between 5.75% and 7.25%, depending on economic conditions. If the job market weakens or inflation cools, rates could dip toward the lower end of that range.
One important thing to keep in mind: If you’re waiting for rates to drop before buying, so is everyone else. When rates fall, more buyers enter the market, driving up competition and home prices.
The Cost of Waiting
Rent is 100% interest. You build no equity.
While rents typically go up year after year, buying a home with a fixed-rate mortgage locks in your housing costs and helps protect against inflation. And historically, home values tend to rise, meaning the home you could buy today will likely cost more tomorrow.
So… Is It a Good Time to Buy?
Most people move because of life circumstances—a new job, a growing family, downsizing, or relocating for a better lifestyle. If you need to buy a home, now is a perfectly fine time to do so.
With stable demand, rising rents, and no sign of a housing crash, waiting may not be the money-saving move you think it is.
If you’re unsure where to begin, a phone call is the best first step. We can help you understand how much you can afford, how much you should afford, what the process is like, and any steps you need to take to get approved to buy a home!
If you find this interesting or helpful, please feel free to share it with a friend, family member, or co-worker – it’s my goal to educate and empower as many people as possible during this incredibly unique time in housing!
Here is how I can help!
- If you are looking to purchase a new home or have questions about your mortgage, the market, getting preapproved, etc., or
- If you are a Realtor Broker, or Financial Services Professional looking for a lender with great financing solutions to help educate your clients on the state of the market to help them feel good about their decisions,
Please call today – I am happy to help however I can!
248.956.0445 | brian@goforwardmortgage.com
Brian Mutter is a twenty-year veteran of the mortgage and real estate industry. His vast experience across nearly all aspects of real estate makes him an incredibly well-rounded problem-solver. Brian’s clients are treated to a white-glove client experience every single time. Education, information, and communication are the cornerstones of his approach. NMLS1109257
