Will 2025 Be a Good Year to Sell Your House? Key Insights for Sellers
January 1, 2025
The housing market has been a rollercoaster for buyers and sellers alike. Mortgage rates, which hovered near 8% in late 2023, dipped to 6.7% by the end of 2024 following multiple cuts to the federal funds rate from the Federal Reserve.
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Despite the slight relief, high borrowing costs and record home prices have kept many potential buyers on the sidelines. Inventory levels have improved but remain below the threshold for a balanced market. Together, these challenges have made 2024 a difficult year for those looking to buy or sell a home.
For many homeowners, the question looms: Will 2025 be a good year to sell a house? From the economic ripple effects of the presidential election to evolving buyer demand, a few factors will shape whether the real estate market offers favorable conditions in the year ahead.
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Mortgage rates: Gradual improvements expected
While the dip in interest rates offers some relief, they remain significantly higher than the ultra-low levels seen during the pandemic. Mortgage interest rates are expected to decline slowly throughout 2025, which is good news for sellers.
Though rates are unlikely to return to the historic lows of recent years, they are moving closer to historical norms. Even a small decrease in mortgage interest rates could encourage buyers to enter the market, creating more opportunities for sellers. To find current mortgage rates, see our story on the best 30-year mortgage rates.
For homeowners considering selling, lower mortgage rates could ignite buyer interest and boost demand. As borrowing costs decrease, more first-time buyers may feel confident entering the market, potentially accelerating sales and contributing to improved market conditions.
Housing inventory levels: Still tight but improving
In late 2024, housing inventory increased to a 4.2-month supply, a notable improvement from the 2.9-month supply seen earlier in the year. While this uptick signals progress, it still falls short of the 5 to 6-month supply typically needed for a balanced market.
On the new construction front, homebuilders are showing renewed optimism. Reduced financing costs have improved builder confidence, offering hope for more housing supply in 2025. If these trends continue, new construction could play a role in boosting the overall supply of homes next year.
For sellers, improved inventory may mean more competition but demand continues to outpace supply in many regions. Well-priced, well-maintained homes will likely attract strong interest, especially in high-demand areas with limited inventory. However, sellers should be prepared for a real estate market that is gradually shifting toward balance, where buyers may have more options and negotiating power than in recent years.
Buyer demographics will shape the housing market in 2025
Buyer demographics are set to play an important role in shaping housing demands in 2025. Millennials, now in their prime homebuying years, continue to dominate the market, often looking for larger homes to accommodate growing families. Meanwhile, Gen Z is stepping into the market as first-time buyers, and they’re looking for affordable properties and locations that support the remote work lifestyle.
In addition, multigenerational living is on the rise, with families pooling resources to navigate high housing costs. This trend is driving demand for homes with extra space, such as properties with in-law suites.
For sellers, tailoring marketing strategies to highlight features that resonate with these groups can be an effective way to maximize interest and secure the best possible sale price.
Home prices: Slower growth expected in 2025
Median home prices remain high, though the pace of price growth has begun to slow. In 2024, prices rose by 4.5% year-over-year. Looking ahead, the National Association of Realtors (NAR) predicts a more modest increase of about 2%, with the median home price expected to reach $410,700 in 2025.
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Regional trends are expected to shape home prices next year. Areas with rising inventory, such as parts of the Midwest and South, may see house prices stabilize or even decline slightly as increased housing supply provides buyers with more options.
Conversely, high-demand regions like the West and Northeast will likely remain competitive due to persistent housing supply shortages. According to Realtor.com’s housing market predictions, cities such as Charlotte, Denver and Miami are expected to lead in price growth. Markets like Baltimore and Des Moines, which have seen inventory gains, may experience more balanced market conditions or slight price dips.
For sellers, this means that while home values are still appreciating, the rapid price gains of recent years are slowing. Accurate pricing and understanding local market conditions will be essential to attracting buyers in 2025. Working with experienced real estate professionals can help sellers navigate these regional differences and position their homes competitively.
Political and economic factors in the housing market
The 2025 housing market will be heavily influenced by broader economic conditions. Job growth, inflation trends and the Federal Reserve’s monetary policy will shape whether the market becomes more favorable for buyers and sellers. If inflation continues to decline toward the Fed’s 2% target, further rate cuts could follow, potentially lowering borrowing costs and making homeownership more accessible.
On the political side, a new administration’s policies could directly impact housing. Changes to tax laws, mortgage regulations, or incentives for homebuilders might affect affordability and supply. For example, measures to increase affordable housing or ease zoning restrictions could help address inventory shortages. At the same time, infrastructure investments might drive demand in certain regions, creating localized market shifts.
Historically, presidential elections tend to reduce uncertainty, encouraging hesitant buyers and sellers to make decisions. Consumer confidence, which often stabilizes after elections, could further support positive market activity. However, lingering uncertainty about new policies may temper the market’s immediate response, making it critical for buyers and sellers to stay informed and adapt to evolving conditions.
Should you sell your house in 2025?
Rising buyer demand could create great opportunities for sellers who’ve been waiting for the right time to list their homes for sale. While property values are expected to grow slowly next year, there’s still potential for gains, making 2025 a promising year for many sellers.
Affordability challenges and economic uncertainty might still pose hurdles for sellers in the new year. However, it’s essential to remember that the best time to sell your house is when you’re ready — both financially and emotionally.
Staying up to date on market trends at both the national and local levels and working with trusted professionals can provide valuable guidance through the home sale process. With a well-thought-out pricing strategy and a willingness to adapt, sellers can set themselves up for a successful sale in 2025.
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