Home Sellers and Buyers: What You Must Know for 2025

The year promises a mix of good and harsh news.

The good news: Buyers will have more properties to choose from. Home prices won't skyrocket. Mortgage rates might drop, to the relief of buyers and some sellers.

The harsh news: Even if mortgage rates fall, they probably won't decline much. That will restrict affordability for buyers, and some homeowners will keep their homes off the market as long as mortgage rates remain elevated.

Here's a cheat sheet for buying or selling a home in 2025 (or doing both), along with advice from successful real estate agents.

Folks get real about mortgage rates

Buyers have one overriding question for 2025: "Can I find a home I can afford?" Three other questions lurk inside that one: What will happen to mortgage rates? What will happen to home prices? Will I find a wide-enough selection of homes?

First, mortgage rates: The 30-year mortgage rate spent much of 2024 above 6.5%, occasionally shimmying above 7%. For most of the year, forecasters expressed confidence that rates would fall below 6% in 2025. But since the election, forecasters have begun revising their mortgage rate predictions upward. They're forming a consensus that mortgage rates will remain above 6% in 2025.

Mortgage rates parked themselves below 5% for 11 years from February 2011 to April 2022, and home buyers and refinancers grew accustomed to the friendly rate environment. But we're entering what more than one commenter called the "new normal." Terri Robinson, a real estate agent with Re/Max Distinctive in Ashburn, Virginia, says buyers "are getting used to the new normal in terms of what interest rates are — and they've stopped looking for that 3% unicorn."