2025 Is a Uniquely Challenging Year for Homebuyers: 4 Key Signs You Should Buy Anyway
Written by
Gabrielle Olya
Edited by
Molly Sullivan
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Entering the housing market feels particularly challenging this year. Interest rates are high, the cost of living is rising and home prices are still unaffordable for many Americans. Yet, if you are in a good position to buy, 2025 could still be a great year to make a home purchase.
Here are the key signs that you should buy a home this year, despite a tough market.
You Can Afford To Buy Today
Yes, home prices and interest rates are high, but they are not likely to come down anytime soon — if ever. So if you can afford to buy a home now, you should go for it.
“For most Americans, owning a home is the best tool for wealth generation,” said Kirsten Jordan, a top agent with Douglas Elliman. “If this is your goal and you have the means to take the leap this year, just go for it.
“Don’t try to time the market like a savant, don’t hold your breath for lower interest rates, don’t get distracted by the noise,” she continued. “The decision to buy a home is extremely personal and is based on your unique, individual situation and needs. Focus on yourself and what’s best for you.”
You’re Financially Prepared for Potential Increases in Insurance Premiums and HOA Fees
Remember that when you buy a home, expenses go beyond the property — and these expenses can increase over time. If you’re able to afford potential increases in your home insurance and HOA costs, you’re in a good place to buy.
“The cost of every single thing is going up, so why should home-related fees and expenses be any different?” Jordan said. “If you’re prepared for the future, you’re prepared for today.”
You’re Willing To Live In a Fixer-Upper
The best deals you can get in 2025 will be on fixer-upper properties. If you’re willing to buy a property that isn’t quite turnkey — and can have patience throughout the renovation process — you’ll be rewarded with significant cost savings.
“Everything is expensive right now and new tariffs are likely going to impact costs for materials, like lumber and steel, and labor down the line,” Jordan said. “Look for a home that may not fulfill all your needs but is livable for now, knowing that you will slowly improve it over a longer period of time.”
You’re Comfortable With the Current Interest Rates
The average 30-year fixed-rate mortgage rate is currently 6.87%, according to Freddie Mac. This rate might put homeownership out of reach for some buyers, but if you can still afford to buy a home with rates where they are, you should do it.
“Interest rates are not going down anytime soon, so make sure you can truly afford the monthly mortgage,” Jordan said. “That means taking into account your costs that can’t be adjusted — mortgage, child care, health insurance, car payments — and those that can — vacations, groceries — and developing your own roadmap for what you feel that you can comfortably afford.
“Never max out your budget for a house,” she continued. “Life happens, and you need a buffer to cover any unexpected costs.”
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