2025 Housing Market Forecasts
Some HighlightsWondering what to expect when you buy or sell a home this year? Here’s what the experts say lies ahead.Mortgage rates are projected to come down slightly. Home prices are forecast to rise in most areas. And, there will be more homes available for sale.Want to know more about what this could mean for your plans this year? Connect with a local agent to discuss your 2025 goals.
Planning To Sell This Year? Don't Forget To Factor in These Closing Costs
If you're thinking about selling your home this year, you’ve probably been monitoring its value for a while so you can sell and still get a substantial profit. But before you start counting how much money you’ll make, don’t forget to factor in seller closing costs into the sale price. Let's take a closer look at closing costs and an overview of the fees that will be deducted from your overall profit. “Closing costs” is a catchall term for the various fees and expenses you must pay upon closing or completing a real estate transaction. These can include various fees, expenses, and charges, which are split between the home's buyer and seller. These fees do not include realtor commissions.The exact fees can vary depending on your location and the house’s cost. But in total, closing fees can add up to around 2 to 5 percent of the home’s sale price, according to Freddie Mac. Sellers usually take these costs out of their sale proceeds (unless you specifically ask to pay them separately), while buyers need to pay them upfront. Transfer taxMost states or local governments charge some form of transfer tax. According to Bankrate, a real estate transfer tax, also sometimes called a deed transfer tax or documentary stamp tax, is a one-time tax or fee imposed by a state or local jurisdiction upon the transfer of real property. In other words, it's a fee that you’ll pay when the title for the home passes from you to your buyer upon closing. The cost varies widely by location but is typically dependent on the home’s sale price. Also, take note that not every state has this tax.Title-related feesIn most markets, it is the seller who pays for the owner’s title insurance, which protects against potential ownership issues. It’s a one-time payment that protects the future owner from the financial burden of sorting out title issues in court, whether they arise at closing or years down the road. Costs can vary from a few hundred dollars to $1,500 or more.Attorney feesIn some states, home sellers are required to have a real estate attorney to help them with the transaction. The transaction cannot legally close without one. And even when it isn’t mandatory, many choose to hire one to ensure their interests are protected. This is especially true when dealing with complex transactions, distressed properties, or inherited homes. Since markets also vary, in some areas both the buyers and sellers have their attorneys, while in others, it’s common to have one settlement attorney for the real estate transaction. Their fees range significantly — anywhere from $150 to $350 per hour, or it could be a flat fee depending on what they do for you.Escrow or settlement feesFunds are usually held in escrow during the course of a real estate transaction, which means there will likely be fees owed to cover the services of the escrow company. This independent third party not only handles the money that’s being exchanged between the seller and buyer but also manages the signing and recording of the closing documents. As with other fees, the amount varies by state but can range from $300 to $700, or sometimes more. This can also include extra line items related to documentation (drafting, notarization, recordation) and money movement (wire transfers).Prorated property taxesOne of the costs of homeownership is property taxes. And these must be up to date before you hand over the keys to the buyer. All states have some form of property tax, although the rate can vary widely. When you sell your house, you'll be responsible for prorated property taxes due up to the date of the sale, at which point the buyer will take over. Depending on your timing, you may have to pay money at closing to bring yourself up to date.Mortgage payoffIf you still have a mortgage on the property you’re selling, which is common, the remainder of that loan will need to be paid off before the sale is finalized. In some cases, your lender may require you to pay a prepayment penalty for paying off your mortgage before the end of the term. To get an accurate picture of this closing cost, make sure to talk to your lender about what will be required to pay off the home loan.HOA feesJust like with property taxes, if you’re living in a community that is subject to a homeowner’s association, HOA fees will also need to be paid up-to-date as of closing day. Some HOAs also charge a transfer fee to transfer your property to the new owner. Best to check with your HOA’s rules and regulations so you won’t be surprised by any charges.Seller concessionsIn a buyer’s market or just to make the deal go through, it’s a common practice for a seller to offer to pay some of the buyer’s closing costs. This is also referred to as seller contribution or seller credit, which can help sweeten the deal and make your home more attractive to potential buyers. One of the most common seller concessions is agreeing to cover the cost of necessary repairs, especially after the home inspection. The total amount of seller concessions may be limited by the type of home loan the buyer is using. For example, loans backed by government agencies, such as the Federal Housing Administration (FHA), have their limits on seller concessions. If you’ve offered any seller concessions as part of your deal, expect that these funds are also due at closing. Closing costs are so named because they are literally due when you close on the sale of your home. This is after you and the buyer meet with the closing agent, title company, and/or attorneys to disburse the funds and sign all necessary documents. All of the items we've covered above will be deducted from your proceeds on the sale so you won’t need to bring cash to your closing unless you specifically ask to pay for them separately or your property is underwater, which means you owe more on it than it's worth.Unfortunately, though, you often won’t know how much your closing costs will be until roughly three business days before closing day. You will receive a closing statement or settlement statement, a document that includes an itemized list of closing fees. If you have a trusted and reliable agent working on your side, they may prepare a seller’s net sheet. This is an unofficial document that is an itemized breakdown of all of the closing costs, plus an estimate of the sum you will receive, or net after the final purchase contract is signed.
One Homebuying Step You Don’t Want To Skip: Pre-Approval
There’s one essential step in the homebuying process you may not know a whole lot about and that’s pre-approval. Here’s a rundown of what it is and why it’s so important right now.What Is Pre-Approval?Pre-approval is like getting a green light from a lender. It lets you know how much they’re willing to let you borrow for a home. To determine that number, a lender looks at your financial history. According to Realtor.com, these are some of the documents a lender may ask you for during this process:W-2s from the last two yearsTax returns from the last two yearsPay stubs from the last 30 daysBank statements from the last 60 daysInvestment account statements (if applicable)Two years of history of where you’ve livedThe result? You’ll get a pre-approval letter showing what you can borrow. Keep in mind, that any changes in your finances can affect your pre-approval status. So, after you receive your letter, avoid switching jobs, applying for new credit cards or other loans, or taking out large sums of money from your savings.How It Helps You Determine Your Borrowing PowerThis year, home prices are expected to rise in most places and mortgage rates are still showing some volatility. So, since affordability is still tight, it’s a good idea to talk to a lender about your home loan options and how today’s changing mortgage rates will impact your future monthly payment.The pre-approval process is the perfect time for that. Because it determines the maximum amount you can borrow, pre-approval also helps you figure out your budget. You should use this information to tailor your home search to what you’re actually comfortable with as far as a monthly mortgage payment. That way, you don’t fall in love with a house that’s out of your comfort zone.How It Helps You Stand Out Once you find a home you want to put an offer on, pre-approval has another big perk. It not only makes your offer stronger, it shows sellers you’ve already undergone a credit and financial check.When a seller sees you as a serious buyer, they may be more attracted to your offer because it seems more likely to go through. As Greg McBride, Chief Financial Analyst at Bankrate, says:“Preapproval carries more weight because it means lenders have actually done more than a cursory review of your credit and your finances, but have instead reviewed your pay stubs, tax returns and bank statements. A preapproval means you’ve cleared the hurdles necessary to be approved for a mortgage up to a certain dollar amount.”Bottom LineIf you’re planning on buying a home, getting pre-approved for a mortgage should be one of the first things on your to-do list. Not only will it give you a better understanding of your borrowing power, it can put you in the best position possible to make a strong offer when you find a home you love. Connect with a trusted lender to learn more.
Roughly 11,000 Homes Will Sell Today – Will Yours Be One of Them?
Are you hesitant to sell your house because you’re worried no one’s buying with rates and prices where they are right now? Here’s some perspective that can help.The market actually isn’t at a standstill. While there weren’t as many sales last year as there’d be in a normal market, roughly 4.15 million homes still sold (not including new construction), according to the National Association of Realtors (NAR). And the expectation is that number will rise in 2025. That means more people will likely move this year, and they need homes to buy. Homes like yours.But even if we only match last year’s sales pace, here’s what that looks like.Every Minute Homes Are Selling – Literally4.15 million homes ÷ 365 days in a year = 11,370 homes sell each day11,370 homes ÷ 24 hours in a day = 474 homes sell per hour474 homes ÷ 60 minutes = roughly 8 homes sell every minuteThink about that. Just in the time it took you to read this, 8 homes sold.If you’ve been holding off on selling your house because you think buyers aren’t out there, let this reassure you – there are still buyers looking to buy.Every day, thousands of people need to buy homes. So, while higher home prices and mortgage rates have slowed the market down and forced some buyers onto the sidelines, that doesn’t mean the market isn’t active. Many buyers are still eager to make a move because life doesn’t wait for perfect market conditions.With the right agent by your side, you can get your house in front of those buyers while other hesitant homeowners are still putting their plans on pause because they’re worried buyer demand has disappeared. Let’s get your house sold.Bottom LineOn average, 11,000 homes sell every day, and yours could be one of them. In the time it took you to read this, another 8 homes sold.When you’re ready to take the next step, connect with a trusted local real estate agent so you have an agent to create that perfect strategy.
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