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During the peak of COVID-19, we sawinterest ratesplummet and home purchasing rates soar.
Then interest rates skyrocketed and the feat of buying a home became more financially challenging for many Americans.
And then this month, there was another interest rate cut.
So what does this mean for all the folks interested in buying or selling homes in 2025?
And what other factors play a role here?
First-time homebuyers awaiting that big interest rate drop may be left very disappointed.
This year, were fighting mortgage rates that have been hovering around 7%, Morgado said.
They definitely feel the squeeze, especially first-time buyers.
How much might mortgage interest rates drop by exactly?
While thats better, it certainly is higher than before the pandemic.
Low inventory is expected to persist as a challenge for buyersandsellers in 2025.
One of the biggest challenges Ive noticed this year has been inventory, Morgado said.
Builders are trying to keep up, but only so much is possible, and construction costs remain high.
All this lack of inventory keeps prices high even when fewer homes are sold.
Too few homes for too many homebuyers will drive up list prices.
The crazy bidding wars common during the pandemic have cooled off, Morgado said.
The demand is still there; its just a little more cautious.
New home salesjumped 8.8% at the start of 2024, showing this trend, Morgado said.
Even builders are offering enticements like rate buy-downs to sweeten the deal.
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