Welcome to the Monthly Market Report for January 2025. We want to give you the insights that you need to help confidently make the best decisions when buying and selling a home.
“We are your real estate advisors” – RRG
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3 Reasons To Buy a Home Before Spring
Let’s face it — buying a home can feel like a challenge with today’s mortgage rates. You might even be thinking, “Should I just wait until spring when more homes hit the market and rates might be lower?”
But here’s the thing, no one knows for sure where mortgage rates will go from here, and waiting could mean facing more competition, higher prices, and a lot more stress.
What if buying now — before the spring rush — might actually give you the upper hand? Here are three reasons why that just might be the case.
1. Less Competition from Other Buyers
The winter months tend to be quieter in the real estate market. Fewer people are actively looking for homes, which means you’ll likely face less competition when you make an offer. This makes the process feel less rushed and less stressful.
According to the National Association of Realtors (NAR), homes sit on the market longer in winter compared to spring and summer (see graph below):
Fewer buyers in the market means you’ll likely have more time to make thoughtful decisions. It also means you may have more negotiating power. According to the Alabama Association of Realtors:
“A significant benefit of buying a home in winter is the reduced competition. Because of the perceived benefits of spring, many buyers delay the start of their house hunt. As a result, you will find fewer people competing for the same properties during winter. Less demand can translate into more negotiating power as sellers may be more willing to entertain offers or agree to concessions to get a deal closed quickly.”
2. More Negotiating Power
With homes staying on the market longer, sellers may be more willing to negotiate. This can lead to better deals for you as a buyer, whether that means a lower price or added incentives, like sellers covering closing costs or making repairs. As Chen Zhao, an Economist at Redfin, points out:
“. . . buying during the off season means less competition from other buyers. That means potentially negotiating a better deal.”
Plus, when demand is lower, sellers often feel more pressure to work with serious buyers. This could give you an edge to negotiate terms that work best for your situation.
3. Lock in Today’s Prices Before They Rise
Historically, home prices tend to be at their lowest point in the winter months, too. According to data from NAR, home prices last year were at their lowest in January, February, and March — right before the spring buying season kicked in (see graph below):
This trend isn’t new — Bright MLS shows between 2010 and 2024, home prices in January and February were, on average, 15% lower than during the month of peak home prices (typically June). Buying in the off-season means you’re more likely to avoid paying the premium prices that come with the high demand of spring.
On top of that, home prices generally appreciate over time, meaning they tend to go up year after year. That means if you’re ready to buy and you can make it happen, you’re not only taking advantage of what might be the lowest prices of the year, but you’re also locking in today’s price before it increases in the future.
Bottom Line
While spring may seem like the obvious time to buy, moving before the peak season can give you significant advantages, like less competition, more negotiation power, and lower prices.
If you’re ready to explore your options, let’s connect.
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The January 2025 housing market report reveals a complex landscape with several key trends:
Home Prices
Home prices are expected to continue growing, albeit at a slower pace. The average forecast from 21 sources predicts a 2.9% appreciation in 2025[1]. Most areas will likely remain seller’s markets due to limited inventory, though markets with increased supply may favor buyers and see potential price declines[1].
Mortgage Rates
Mortgage rates, while decreasing from recent highs, are settling at levels higher than pre-2022. The average forecast for 30-year fixed mortgage rates in 2025 is 6.36%[1]. This new normal may impact buyer behavior, with some experts warning that prolonged high rates could lead to buyer fatigue[1].
Inventory
Housing inventory is projected to grow in 2025. Realtor.com forecasts an 11.7% year-over-year increase, while Altos Research predicts a 15% rise[1]. This trend could provide more options for buyers and potentially shift market dynamics.
Home Sales
Total home sales are expected to rebound in 2025, with projections reaching 5.1 million units, up from 4.6 million in 2024[1]. This increase suggests a gradual market recovery and renewed buyer interest.
Market Dynamics
The 2025 market is characterized by regional variations, emphasizing the local nature of real estate. Buyers may find opportunities during periods of mortgage rate volatility, but overall conditions are expected to remain challenging[1].
Role of Real Estate Agents
In this complex environment, the guidance of experienced real estate agents is crucial. Buyers primarily seek help in finding the right property (49%) and negotiating terms (14%), while sellers value assistance in marketing their homes (22%) and competitive pricing (20%)[1].
As we navigate the 2025 housing market, it’s clear that adaptability and local expertise will be key. Whether you’re buying or selling, partnering with a knowledgeable real estate professional can help you make informed decisions in this evolving landscape.
Citations: Noted in the Housing Market Update
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