As we head into the holiday season and look toward the new year, it’s the perfect time to prepare for what’s next in the housing market. With inventory growing and buyers motivated to make their move, staying informed can help you hit the ground running in 2025.

1. More Inventory Means More Options for Buyers

Good news: there are more homes available for buyers now. Inventory has reached its highest level since 2019, with a 4.3-month supply of homes. (New York Post) This means buyers have more options, and there’s less pressure to make quick decisions. If a buyer has been waiting for the right time, this could be it.

2. New Homes Are on the Rise

New construction has contributed to an increase in inventory. Builders are working hard to meet demand, especially for single-family homes. In October, construction spending went up by 0.4%, driven largely by new builds. (Reuters) Builders are also offering incentives like discounts and upgrades to make new homes more attractive. These perks can help buyers who are deciding between a new home or one that might need renovations. (The Wall Street Journal)

3. Home Prices Level off After Years of Increases

In October 2024, the median home price in the U.S. was $424,950, unchanged from the same time last year. (Realtor) This stabilization suggests that while prices remain elevated, the rapid increases we’ve seen in recent years are beginning to level off.

However, affordability remains a concern, especially for first-time buyers. Homes are still over 50% more expensive than pre-pandemic levels, making it challenging for many to enter the market. (Reuters)

4. Mortgage Rates: High but Stabilizing

Mortgage rates are higher than in past years, with the average 30-year fixed rate hovering around 6.84% in November. (MarketWatch) While rates are expected to drop slightly in 2025, they will likely remain above the historically low levels we’ve seen in recent years.

What does this mean for buyers? It’s important for house hunters to work with their loan officer to lock in a rate when it makes sense for their situation. Because it can sometimes end up costing more overall to “wait it out,” we encourage homebuyers who can afford to buy now to not wait for a dramatic rate shift before entering the market.

5. Loan Limits Are Going Up

In 2025, the baseline conforming loan limit for single-family homes in most areas of the U.S. will be $806,500. However, in high-cost areas, including Alaska and Hawaii, the limit is higher due to elevated home prices. For these regions, the loan limit for one-unit properties is set at $1,209,750. (Fannie Mae Single Family)

This change gives buyers a little more room to finance their home using a conventional loan. Conventional loans often have more favorable rates and qualifications standards than other options.

How to be prepared in 2025

1. Keep up-to-date with the market: Every situation is unique, which is why it's helpful to be aware of and understand these changes. Especially for agents, it's helpful to understand these to guide your clients through their unique situation
2. Don’t expect huge changes: Economists aren’t anticipating huge rate swings or inventory shifts. Waiting for the market to change could cost homebuyers in the long run.
3. Consider new builds and renovations: Builders are offering incentives that could make a new home more appealing to your buyers. Renovation loans could help expand a homebuyer’s search.
4. Focus on programs & affordability: Movement offers programs and strategies are available to help buyers with the cost of buying a home.

Stay ahead of the market and be confident in your next move. Let’s work together to make 2025 a successful year for everyone.