Spring is in full bloom, which typically means the homebuying season is heating up with the weather. Yet, 2025 isn’t a typical year in real estate, as uncertainty surrounding the economy has the market in limbo. Buying a home is a very real goal for many, and this spring’s market changes could be the influencing factor that puts you in your dream retirement home. This real estate summary will explore April’s housing market trends to forecast potential opportunities for 55+ buyers.
Mortgage Rates Stay Below 7%
April closed out with an average 30-year fixed-rate mortgage of 6.81%. While it’s a fraction higher than average rates at the beginning of the month, it’s lower than last April’s rate of 7.17%. The lack of change in mortgage rates isn’t surprising, as predictions suggest that rates will remain above 6% throughout the year. However, the decrease from last year and the certainty of projections could spur an increase in sales, as prospective sellers won’t be tempted to wait for market changes.
Home Inventory Is Finally Growing
Last year was the slowest home sales market on record since 1995, as homeowners held onto their low interest rates from a few years ago. This year shows promise as year-over-year comparisons showed 17% more homes for sale in February and 10% more in March than last year. April showed even more promise with 30% more active inventory on the market than this time last year.
While many states show minimal inventory growth, seven states (Arizona, Colorado, Florida, Idaho, Tennessee, Texas, and Utah) are above pre-pandemic inventory levels. The inventory of unsold existing homes jumped 8.1% to begin April with a 4-month supply of homes on the national market.
Home Prices Are Finally Falling in Some Areas
The median existing home sales price is $403,700, down from February’s national average. However, prices tend to align with inventory, which can mean prices are higher in some regions than others. For example, the Northeast and Midwest have tight inventory, locking prices in place. However, housing markets in Texas, Florida, and Louisiana are seeing rising inventory and price declines.
What 55+ Homebuyers Need to Know
Baby boomers make up 42% of all home buyers, making them the top generation of homebuyers. This news makes it clear that 55+ buyers, including retirees, can secure funds to purchase a new home. Still, it pays to take precautions and prepare for the restrictions of the current stagnant market.
Consider Your Budgeting Options
While today’s steady mortgage rates disappoint buyers hoping for sharp decreases, minimal volatility makes the future more predictable. Perhaps this is why more buyers are turning to adjustable-rate mortgages (ARMs). While these loans begin with lower initial rates, they are subject to rise over time with market changes. This could be a risky move for 55+ buyers on a fixed income, especially if you have the funds for a substantial down payment.
Responsible budgeting is the key to getting the home you want and maintaining financial security. Consider your future income to set a firm budget that will allow you to make a strong down payment and confidently handle monthly payments. Budget considerations should also include the cost of living in your target destination and homeowners’ association (HOA) fees.
Maximize Your Down Payment
While mortgage rates are expected to remain stable throughout the year, the long-term outlook for the housing market remains unpredictable. While first-time homebuyers generally have to depend on savings, many 55+ buyers have the advantage of pulling a larger down payment from a previous home sale. A 20% down payment offers a layer of security, regardless of what the future brings. A higher down payment can make your monthly payments manageable, allowing you to adapt to economic trends that impact the cost of living.
Maintain a Solid Credit Score
During times of economic uncertainty, a strong credit score gives you more buying power. When a home purchase is in your future, reducing debt should be a top priority. Ideally, you want your credit score above 650 and a debt-to-income ratio below 30%. These numbers will allow you to access the best mortgage rates available in your area.
Taking Advantage of Assistance for 55+ Homebuyers
Homebuyers’ assistance comes in many forms to reduce the burden on all buyers. Programs address various elements of the buying process, from lowering down payments and offering more accessible loans to reducing closing costs. While 55+ buyers may be eligible for special discounts, it’s essential to remember not to box yourself in and miss out on other potential discounts.
For instance, first-time homebuyer programs and loans are generally available to anyone who has not owned a home as their primary residence in the past three years. These tips can help you explore your options for homebuying assistance and find the program or combination of programs that will best meet your needs.
- Seek out programs based on age groups, income levels, and other criteria to get down payment assistance.
- Thoroughly investigate mortgage loan options to find loans with accessible rates and retirement income options.
- Search for programs that offer grants (don’t have to be repaid) instead of loans.
- Check your eligibility for low-interest loans that will allow you to avoid the consequences of the current average rates.
- Look for programs unique to your state.
- Consider the benefits of finding a home in a 55+ community.
Find Your Dream Home in 2025
This year’s housing market brings about unusual challenges for homebuyers of every age. However, knowledge is power, and your key to maximizing your buying power. Maximizing your down payment and taking advantage of homebuyers’ assistance programs will help you stretch your retirement income. Considering opportunities in 55+ communities can create unexpected options you may not otherwise have considered.
If you’re ready to find your dream home in a 55+ community, 55places is here to help. Contact us today to learn more about how we can help you find the right home in the perfect community!
