7 Biggest Myths of Buying a Home in 2025— Dispelled by Experts
Written by
Martin Dasko
Edited by
Heather Taylor
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According to the most recent data from the National Association of Realtors (NAR), total existing home sales dropped 1% in September compared to August and is down 3.5% from 2023. The data also found that the median home price for an existing property was $404,500 in September, which is up 3% annually.
With conflicting information coming out about real estate as investors anxiously await to see what happens with interest rates, there are many myths swirling in the industry.
Here are seven common misconceptions and myths about buying a home looking forward to 2025.
Myth 1: You Should Wait For Rates To Drop Before Buying
Joel Carson, president and principal broker at Utah Real Estate, pointed out that potential buyers are waiting for interest rates to come down before buying, but there are also many others waiting. “One percentage point can make a huge difference in your monthly mortgage payment, but while you wait for interest rates to come down, home prices are creeping up,” said Carson.
It’s important to remember that you’re not the only person waiting for rates to drop and that additional competition could arise if you wait too long. While it’s completely understandable if you’re only looking at your monthly payment, you don’t want to end up paying more for a home because you waited too long.
“From an investment perspective, I recommend buying a home now at its current value. When interest rates come down, refinance. You will save money on the home price and have a lower interest rate,” added Carson.
Myth 2: You Need 20% Down To Buy a Home
The good news is that you don’t have to save up forever to become a homeowner, as there are many options available to help you enter the market. While you may have traditionally wanted to save 20%, this isn’t always an option.
“Lots of people get loans with only 3-5% down, especially with programs for first-time buyers,” said Ray Franz, a real estate investor and the owner of CharterOak HomeBuyers. There are numerous options, like Federal Housing Adminstration (FHA) loans, for those who don’t want to wait until they have 20% saved up to enter the real estate market.
Myth 3: Buying a Home Is Always Better Than Renting
“Sometimes renting makes more sense, depending on your money goals and where you live,” said Franz. You have to decide what works for you right now so that you don’t try to become a homeowner for the sake of it.
“If you’re unsure about staying in one city long-term or value the freedom to move as needed, renting is probably better for you and can offer more flexibility,” said Lukasz Kukwa, a real estate advisor at EXP Realty. “Don’t fall into the trap of thinking you can’t live well as a renter.”
While home ownership is often glorified, it isn’t always the best financial decision for everyone since your personal situation matters. With higher interest rates and housing prices, there’s no reason that you should feel like home ownership is automatically the best decision.
Myth 4: The Housing Market Will Crash Soon
Franz pointed out that there’s no sign of a big crash happening soon so waiting too long might mean you’ll end up paying more for the same house later on. While there have been speculation about a possible correction of sorts, the reality is that there are no signs of this happening. If you wait around for a housing market crash to happen, you may miss out on purchasing the right home.
Myth 5: The Best Homes Are Only Available in the Spring
Franz noted that great homes are listed all year long, and buying in the fall or winter might mean you face less competition. Instead of waiting for 2025 to enter the real estate market, you can start your home search now to see what’s available.
Myth 6: You Should Buy a Home When Rates Drop
Just because rates drop doesn’t mean that it’s the best time for you. You have to ensure that you’re financially prepared for this kind of commitment. Kukwa mentioned the importance of the 28/36 rule, which states that housing costs should account for no more than 28% of gross income and total debt should remain under 36 percent.
“Exceeding these limits can create financial stress or make it harder to secure favorable mortgage terms. It’s also important to fully understand the true cost of owning a home,” said Kukwa.
Just because rates are going down doesn’t mean that you should buy a home or that getting into real estate makes sense for your situation.
Myth 7: A Home Is Always a Good Investment
Kukwa warned about the myth that a home is always a good investment. “Misconceptions can lead to taking on unaffordable mortgages or making financial decisions that don’t align with your life,” he added.
Before seeking pre-approval for a home mortgage, you’ll want to consult with a financial planner to ensure the purchase aligns with your financial goals because a home may not always be the best use of your capital.
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