2025 Housing Market: What Buyers Can Expect

Recent interest rate reductions have sparked increased home-buying interest, a trend experts at Zillow predict will grow in 2025. Following three consecutive Federal Reserve rate cuts in 2024, the market is expected to see more variability but also greater accessibility for buyers.

“We’ll see more single-family homes hit the market than in the past five decades,” said Marta Rey Babarro, Zillow’s VP of Research/Insights. Many of these homes were built during the pandemic construction boom and will be finalized next year.

Buyers’ preferences are shifting, with smaller, cozier homes in demand, a departure from the larger, spacious properties favored during the pandemic. Millennials, now the largest group of homebuyers, are expected to drive prices up further, particularly in markets like Miami, where prices are forecasted to rise 4%.

For those considering a purchase, Zillow recommends hiring a real estate agent, planning your budget carefully, and leveraging tools like their Buyability app to assess affordability.

Sustainability will also be a key focus, with buyers seeking homes with energy-efficient features like solar panels. Additionally, Zillow’s Climate Risks tool can help buyers evaluate potential weather-related risks in their desired areas.

With more options and changing trends, 2025 promises to be an exciting year for homebuyers.