Realtor.com has analyzed various market factors to identify the most promising locations for first-time homebuyers in 2025. The list prioritizes affordability, strong local economies, family-friendly environments, and investment potential. Zillow forecasts a more active market with increased inventory in 2025, offering buyers more negotiating power.
Buying a home for the first time is a significant milestone that shouldn't be rushed. Finding the perfect location to build one's life is a challenging task in itself. Realtor.com aimed to assist first-time homebuyers by compiling a list of the most promising markets for 2025. The selected locations offer advantages for first-time buyers in terms of housing affordability, availability of homes for sale, and overall location quality. Danielle Hale, Chief Economist at Realtor.
com, emphasized that while these areas present excellent opportunities, buyers might need to make compromises to reach the closing table. Ultimately, the best place to buy depends on individual priorities and family needs, and Realtor.com's list provides a helpful guide.Realtor.com based its list on several key factors: affordability, robust local economies, vibrant communities suitable for raising families, and potential for investment returns. Adding to this positive outlook, Zillow predicted a more active real estate market in 2025 with increased inventory, giving buyers more negotiating power. Zillow forecasts modest home value growth of 2.6% in 2025, a gradual pace similar to last year's growth. Skylar Olsen, Zillow's Chief Economist, explained that after a surprisingly competitive buying environment in 2024 due to affordability challenges, more inventory in 2025 will create a more relaxed atmosphere for buyers.The average long-term U.S. mortgage rate experienced another increase last week, reaching its highest point since July. Freddie Mac reported that the benchmark 30-year fixed-rate mortgage loan rate climbed to 6.93% from 6.91% the previous week, compared to 6.66% a year ago. This upward trend in mortgage rates reflects the rise in bond yields that lenders use to determine mortgage prices, specifically the yield on the U.S. 10-year Treasury, which has surged from 3.62% in mid-September to 4.66% this week. Despite this, existing home sales demonstrated a 4.8% increase in November compared to October, reaching a seasonally adjusted annual rate of 4.15 million, according to the National Association of Realtors. This marked a 6.1% surge compared to November 2022, the largest year-over-year gain since June 2021. The upward trend in home sales surpassed economists' projections of 4.1 million. The national median sales price also experienced an increase for the 17th consecutive month, rising 4.7% from a year earlier to $406,100. However, despite these November and October increases, home sales still lag behind last year's pace when they reached a nearly 30-year low
REALTOR.COM FIRST-TIME HOMEBUYERS HOUSING MARKET 2025 TRENDS AFFORDABILITY MARKET ANALYSIS Zillow HOME INVENTORY MORTGAGE RATES
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