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Home / Articles by Dc Aiken / 2025… A Good Year for Homebuyers?

2025… A Good Year for Homebuyers?

Aikenomics
Market Insights from D.C. Aiken

Home sales in the Metro Atlanta area were at 30-year lows in 2024, so my prediction that home sales will rise in 2025 may not be that special. But what might be special is that we could see a notable rise in housing sales in 2025 without prices rising substantially again. I am projecting that home prices in the Metro Atlanta area should rise but only slightly… maybe 1-3%. However, what is now beginning to make a difference is that instead of sellers cutting their prices (a practice we have seen over the years when a house is on the market for a period of time or when we enter a housing sales slowdown), they are beginning to offer incentives like contributing towards closing cost and or buying down rates. For the past several years, we have only seen this behavior coming from the new homes area, and even then, it has not been a whole lot. Today, we are seeing new home construction offer 3-6% seller contributions, which can make a huge difference in cash to close as well as potential payments. Just 3% on a $600K home can be $18K to go towards closing costs or even buying the rate down below current no-point rates. In the past, you would see sellers cut their price on their once-listed $600K home by maybe $15,000. Sounds good, right? Well, let’s see… If they reduce the price by $15,000, that might save you $95 per month on a standard 30-year fixed rate. However, if you used the same $15,000 and bought the rate down by .75% in rate, you would save about $180 per month. That’s almost twice the monthly savings. Your response might be, “But I am getting the house for $15K less if they reduce the price.” I understand that, but are you selling the house in the next year or two? Probably not. So, net equity is not really a factor, and you are maintaining the values in your soon-to-be new neighborhood. Your soon-to-be neighbors will like this, too.

Seller contributions were standard until we entered the 2020-2022 home sale environment, where we saw the “multiple bid” offers, and each offer pushed the price higher and higher. That is when homes were on the market for less than 15 days, and rates were below 5%. Today, houses have been on the market for almost 60 days and, in some cases, more. There are “bargains” out there to be had, and sellers are now willing to negotiate. Seller contributions coming back will lead us out of this historical slowdown in real estate sales, as I am not predicting that mortgage rates will fall notably in 2025. Perhaps rates might come back down to 6%, but that might not happen until this summer or even later in the year. Sellers not cutting their prices and giving contributions towards closing costs and or points will be the catalyst needed to raise home sales in 2025. I think I have shown that reducing the sales price, in many cases, is not the best deal for homebuyers. Overall, cash-to-close and payments will drive home sales for 2025. The pendulum has definitely moved in favor of potential homebuyers, and sellers who are smart should consider paying some toward closing costs and or buying down the potential buyer’s rate. Payment and cash-to-close sell homes.

Remember… the BEST RATE… IS A LOCKED RATE… with a float down… ask me about our program that allows you to lock your rate and then float down if rates move lower.

Make sure you (or your buyer) get pre-approved before looking at homes so we can determine if you are looking in the correct price range and have you armed to submit an offer with a pre-approval letter!

Thank you for reading this blog. I hope that the facts and insights I share provide value to you.

If you’d like to allow me to invade your inbox and receive a weekend update from me each week, please provide your name and email address, and I’ll start sending over more facts and insights like you just read, as well as current market rates and news. If you have a topic you would like me to consider covering, please feel free to send it over. Who knows… I may write about it!

Blog post date: Thursday, January 9, 2025

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D.C. Aiken By D.C. Aiken
The opinions expressed within this article are the author’s and do not necessarily reflect the opinions or views of BankSouth Mortgage or its affiliates.
https://banksouthmortgage.com/wp-content/uploads/2023/11/DC-Aiken-Blog-Header-10-2023-1-1.png 806 1434 MGreene@banksouth.com https://banksouthmortgage.com/wp-content/uploads/2022/08/BankSouth-Mortgage-Logo.png MGreene@banksouth.com2025-01-09 14:15:112025-01-09 14:15:112025… A Good Year for Homebuyers?
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