The U.S. housing market in 2025, according to Zillow’s forecast, will be a better time for homebuyers. Although problems like high prices and uncertain mortgage rates will still exist, more homes will likely be available.
That could make the market less competitive than in recent years, offering some relief to first-time buyers, investors and families who have struggled in the past.
A Surge in Inventory
In 2025 homebuyers are expected to have some relief as more homes become available. Zillow forecasts that home sales will surge to 4.3 million, up from an estimated 4 million in 2024.
This means buyers will have more choices and less competition for each property. In the past when there were more homes on the market, buyers gained more power, leading to slower price growth and more flexibility in negotiating with sellers.
Skylar Olsen, Zillow’s chief economist, points out that 2024 was unexpectedly tough for buyers due to high affordability issues. However, as more homes are listed in 2025, the market is expected to become favorable, making it easier for buyers, especially in areas where homes have been scarce.
Affordability Still a Concern, But More Tolerable
In 2025, more homes will be available, but affordability will still be a big issue. Zillow predicts home prices will rise by 2.6%. This means prices won’t drop sharply, but buyers may still struggle with costs.
The price hike will be smaller than in previous years, but buyers should keep an eye on local market trends. Some areas may see bigger price jumps than others, where demand remains high, even with more homes on the market.
Mortgage Rates: The Wild Card
Mortgage rates will be an important factor for buyers in 2025. After swinging a lot in 2024, mortgage costs are expected to keep fluctuating in 2025. Zillow’s report predicts that rates fall and then rise again, similar to what happened earlier in the fall.
Mortgage rates affect how affordable homes are. When rates surge, borrowing money becomes more expensive, making homes harder to afford. If rates fall, buyers may find it easier to get a mortgage, which could lift demand.
Because of this uncertainty, buyers should be ready for changes and talk to financial advisors to determine the best time to lock in a mortgage rate.
More Buyer’s Markets Across the U.S.
According to Zillow, several big U.S. cities are now considered “buyer’s markets.” This includes places like Miami, Atlanta and Tampa in the Southeast, where more homes are available, and sellers are more likely to lower prices to attract buyers. With more homes for sale, buyers have more power to negotiate better deals.
As more homes are listed, buyer’s markets are expected to spread to other areas, especially in the Southwest. Cities like Phoenix, Las Vegas and Dallas, which traditionally have strong housing markets, are seeing price drops as more homes become available.
Those areas could deliver better opportunities for buyers in 2025 if mortgage rates stabilize or fall.
What Buyers Can Do Now
Buyers may have better chances of finding a home in 2025 owing to a more favorable market. However, here are some strategies to keep in mind:
Stay Flexible – Since mortgage rates are uncertain, buyers should stay flexible during their home search. They may need to adjust their expectations depending on changes in interest rates and local market conditions.
Understand Local Markets – Though buyers may have more options nationally, some areas could still have high demand and higher prices. Buyers need to research the specific areas they are interested in and understand what’s driving the market there.
Prepare for Negotiation – As more homes become available, buyers will have more room to negotiate. They should be ready to make strong offers and know that sellers might be more open to negotiating if their home has been on the market for a while.
Watch Mortgage Trends – Buyers should keep an eye on mortgage rates and take advantage of good opportunities to lock in favorable terms. Regularly consulting with mortgage experts can help buyers navigate rate changes.
Conclusion
In 2025, U.S. homebuyers could get a better deal with more homes available and less competition. However, it won’t be easy — affordability will still be a headache, and mortgage rates will remain unpredictable.
But with more homes on the market, buyers will have more negotiating power. The trick will be staying flexible, understanding local market trends and acting when the time is right. For those ready to move, 2025 could offer a good opportunity.
