Real Estate and the Current Economy

Real Estate in Today’s Economy: What Buyers and Sellers Need to Know

The real estate market in 2025 is a mix of opportunity and caution. With inflation showing signs of easing and the Federal Reserve holding interest rates steady, many are asking: is now the right time to buy or sell a home?

Interest Rates and Affordability
After two years of sharp increases, mortgage rates have begun to stabilize, hovering around 6.5% to 7%. While these rates are higher than the once in a lifetime lows seen in 2020 and 2021, they're not high historically. Buyers are adapting, often turning to creative financing tools—like rate buydowns or adjustable-rate mortgages—to make monthly payments more manageable.

Inventory Still Tight
A major factor shaping the market is low inventory. Many homeowners are staying put, reluctant to give up their low interest rates. This means fewer homes for sale, which continues to put upward pressure on prices in many areas, despite softer buyer demand.

Buyers Are More Cautious, but Motivated
Today’s buyers are more informed and deliberate. They're prioritizing long-term value, affordability, and quality over speed. First-time buyers, in particular, are facing challenges with affordability, but some relief is coming from stabilized prices and expanded first-time homebuyer assistance programs.

Sellers Need to Be Strategic
For sellers, pricing competitively and making small upgrades—like fresh paint, landscaping, and staging—can make a big difference. While it’s no longer a red-hot seller’s market, well-prepared homes are still moving quickly, especially in desirable neighborhoods.

What’s Next?
Economists expect moderate growth in home prices for the rest of the year, depending on location. Much will depend on inflation trends, job market stability, and whether the Fed adjusts rates again. But one thing remains clear: real estate continues to be a strong long-term investment, especially for those who can weather short-term fluctuations.

Bottom Line
Today’s market rewards preparation and perspective. Whether you’re buying or selling, working with a knowledgeable real estate professional and staying informed about economic trends can help you navigate this evolving landscape with confidence.