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The real estate market is gearing up for an eventful 2025, with promising opportunities and a few challenges to navigate. From shifting buyer-seller dynamics to mortgage rate rollercoasters, here’s what you need to know about Zillow’s latest housing market predictions—and how you can prepare to make the most of the year ahead.
A More Active Market and Room for Buyers to Breathe
After a competitive 2024, 2025 may feel like a welcome change. Zillow anticipates a more active market, with home sales picking up and modest home value growth of about 2.6%. That’s good news for buyers, who can expect more inventory and negotiating power. If you’ve been waiting for the right moment to jump in, this could be your year!
Key Takeaway: More homes on the market mean more options, less rush, and a better chance to find your dream home.
Mortgage Rates: Buckle Up for a Bumpy Ride
While there’s optimism that mortgage rates could ease, their unpredictable nature means potential buyers should stay flexible. Rates are likely to dip and climb throughout the year, creating windows of opportunity for buyers and those looking to refinance.
Pro Tip: Keep an eye on the market, and be ready to act during a rate dip—it could make a big difference in your budget.
The Rise of Buyer’s Markets
Currently concentrated in the Southeast, buyer’s markets are expected to spread into the Southwest in 2025. These areas offer more affordable homes and greater negotiating power for buyers. However, if mortgage rates drop significantly, increased competition could shift power back to sellers in some regions.
What This Means for You: If you’re eyeing a home in the Southwest, 2025 could present prime opportunities to secure a great deal.
Cozy Living Takes Center Stage
The desire for expansive open floor plans is being replaced by a preference for smaller, more functional spaces. “Cozy” homes are trending, offering affordability and charm, while small condos are finding their footing after years of fluctuation.
Fun Fact: Listings mentioning “cozy” increased by 35% in 2024, reflecting this growing shift in design and lifestyle preferences.
Rental Market: Opportunities and Changing Dynamics
For renters, 2025 may signal the end of an era for concessions like free rent or parking, as the multifamily construction boom slows. Rent prices are stabilizing, but by the second half of the year, property managers may feel less pressure to sweeten deals.
Pro Tip: If you’re considering renting, act early in the year to take advantage of potential deals before the market tightens.
Pets Take Priority
Pet-friendliness is becoming a nonnegotiable for renters. With 58% of renters now owning pets, property managers who fail to cater to furry friends may struggle to stay competitive.
For Renters: Look for pet-friendly properties as they’re becoming increasingly common.
For Property Managers: Allowing pets could be a game-changer in attracting and retaining tenants.
Final Thoughts
The 2025 housing market promises opportunities for buyers, sellers, and renters alike—but it will require strategy and flexibility. Whether you’re planning to buy your first home, downsize to something cozy, or find a pet-friendly rental, staying informed and prepared will be your greatest asset.
If you have questions about the market or need help navigating your next steps, I’m here to guide you every step of the way. Let’s make 2025 the year you achieve your real estate goals!
Original article: Zillow’s Housing Market Predictions for 2025 – Zillow Research
