Navigating the housing market in 2025 is a roller coaster of big hopes and small changes. Yet, it appears that some of the most encouraging news for buyers is on the horizon. Mortgage rates are on a steady (albeit slow) decline, tempting sellers to enter the market. As home inventory increases, buyers may see less competition, leading to dropping prices. Although dramatic changes aren’t expected for the remainder of the year, these small changes could create just the right market for many buyers to find their dream home.
Mortgage Rates Are Finally Decreasing
National mortgage rates have decreased for the fifth consecutive week at the end of June, offering good news for both buyers and sellers. Entering July, the average 30-year fixed mortgage rate stands at 6.67% and the average 15-year fixed mortgage rate is down to 5.8%. This is the largest weekly decline since early March, increasing the potential for more sellers to enter the market.
While the Federal Reserve is scheduled to meet at the end of July, most forecasters don’t expect the meeting to produce a rate cut. What does this mean for buyers hoping to make a move before the Fed meets again in September?
While it’s hard to predict seller activity in today’s uncertain market, sellers who have been watching the market may take advantage of the current decrease in hopes of attracting summer buyers. This could mean increased home inventory in many regions long before the anticipated mortgage drop this fall.
Home Inventory Increasing in Many Areas
While most economists aren’t ready to call the current environment a buyer’s market, inventory is rising. However, major inventory increases are largely locational, leaving buyers in some areas struggling to find affordable options.
Housing markets in several unexpected cities and metros are experiencing higher housing inventory levels than they did before the pandemic. Cities topping the list of increased home inventory include:
Other areas making progress toward a balanced market include:
However, many areas in California and the upper northeastern coast are falling behind.
Home Prices Falling Where Inventory Increases
The national average home price is still increasing, but price growth has slowed substantially. The national median home price has risen 1.3% from a year ago to $422,800. However, regional differences are significant, as resale home prices in the Midwest are around $326,400 compared to $633,500 in the West.
40% of homes on the market in June have taken a price reduction from the original list price. However, many of these decreases may be concentrated in specific areas. Eight states have home prices below their 2024 levels, including:
Many of these are located across the Sun Belt, where inventory has built the most.
Meanwhile, home prices remain high or are even rising in locations with lower inventory, including:
- Syracuse, NY
- Montgomery, AL
- Nassau-Suffolk County, NY
- Toledo, OH
- Trenton, NJ
Some of the most expensive markets in the nation are in California and include:
- San Jose
- Sunnyvale
- Santa Clara
- San Francisco
- Oakland
- San Luis Obispo
What 55+ Buyers Need to Know
Affordability remains an issue for lower-income buyers, but there are notable improvements for buyers earning between $75,000 and $100,000 annually. About 21% of listings are within reach for these income earners, which means buyers need to find ways to stretch their budget as much as possible to achieve their homebuying goals. While economic conditions are beyond your control, there are steps you can take to get the best mortgage rate possible.
Focus Your Budget on Your Monthly Payment
Watching every fluctuation in market prices and mortgage rates can convince you that you’re priced out of the market. However, many 55+ buyers are in a position to put down an admirable down payment and have a clear idea of their budget in the future. By focusing on how much you can afford as a monthly payment, you can accurately set a budget to shop for homes in your target area without overspending.
Maximize the Value of Your Down Payment
If you’re wondering how much of your nest egg you should spend on a down payment, you may have considered how much a bigger down payment can shorten the life of your loan or substantially lower payments. Yet, most buyers don’t realize it can get you a more favorable mortgage rate. While government-backed mortgages have some of the lowest down payment options available (and many 55+ buyers are eligible), putting down more than the minimum could get you lower rates, which will have a serious impact on how much you save during the life of your loan.
Get Your Credit Score in Shape Before Seeking Preapproval
While mortgage rates are decreasing, the drop is nominal. Your financial history is one thing that can help you secure a loan with the lowest rates possible. A buyer’s credit score is one of the biggest indicators of their potential risk of defaulting on a loan. While several government-backed mortgage loans allow borrowers to qualify with a low to fair credit score, getting your score above 740 can help you get better loan terms.
Assistance for 55+ Homebuyers
The number one obstacle for most homebuyers is the down payment, but 55+ buyers often feel this statistic shouldn’t apply to them. If you’re entering the homebuyers market in your fifties without a home to sell or a nice nest egg to fund your down payment, you’re not alone.
Luckily, 55+ buyers are eligible for a variety of down payment programs, many of which are forgivable loans or programs with deferred payments. Available down payment assistance programs vary by location, which can make them harder to find. Down Payment Resource simplifies the down payment assistance search by sharing information about over 2,000 homeownership programs all in one place. Visit the website to explore programs and learn more about how to apply.
Finding Your Ideal Retirement Home in 2025
No matter what’s happening in the market, the ideal time to purchase a home is when you’re financially ready. 55+ buyers have many options when it comes to mortgage loans and assistance. As a mature homebuyer, you also have the advantage of seeking affordable homes in age-restricted communities.
Many active adult communities have affordable homes ranging from condos to single-family homes in a community packed with resort-style amenities. These communities can help retirees stretch their budget with increased entertainment options and maintenance included in the monthly payment or homeowners’ association (HOA) fee.
If 2025 is the year for you to find your ideal 55+ community, the team at 55places can help. Get in touch today to learn how we can help you on your journey to homeownership.
Like this content? Sign up to receive more
Want to learn more about 55+ communities?
- Insights and market stats
- Instant new home alerts
- Answers from local 55+ experts
