US housing market: Is 2025 the year of the buyer’s market?

The U.S. housing market is entering the most buyer-friendly spring since the COVID-19 pandemic, according to a real estate expert.

Realtor.com senior economist Joel Berner told FOX Business that now is a good time for buyers to enter the market after years of subdued transactions, especially in 2024, which shaped up to be the slowest year for existing home sales since 1996, according to the firm’s data.

He believes the housing market is transitioning from a seller’s market to a more balanced one, with increased inventory, more price reductions, longer time on the market and lower listing prices compared to last year, with all contributing to the current buyer-friendly conditions.

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“Independent of mortgage rates, we’re seeing things move in a pretty buyer-friendly direction right now,” he said. Berner added that falling mortgage rates aren’t necessarily indicative of a buyer’s market, as they can lead people to rush into the market, driving prices higher.

Mauricio Umansky, founder of the billion-dollar real estate brokerage The Agency, doesn’t expect to see the same level of opportunities for buyers as during the housing crisis of 2008-2009, but he is confident the housing market is moving into a buyer’s market. 

Like Berner, Umansky said that current market conditions are favoring buyers, noting that there are “great opportunities for buyers to be aggressive and write strong offers.”

Mauricio Umansky doesn’t expect to see the same level of opportunities for buyers as during the housing crisis of 2008-2009. (Photo by Patrick T. Fallon / AFP) (Photo by PATRICK T. FALLON/AFP via Getty Images) / Getty Images)

“2025 is going to look significantly better than that because of what’s on the market right now, a lot more options for folks, a lot better prices for folks and people deciding that… it might be a good time to get on the sidelines,” Berner said. 

Umansky said inventory is beginning to rise and, as a result, “sellers have become more lenient” with regard to price. Right now, Umanksy said there will likely be some reductions in asking prices, though nothing extreme. 

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Higher mortgage rates over the past three years have created a “golden handcuff” effect in the housing market as sellers who locked in a record-low mortgage rate of 3% or less when the pandemic began have been reluctant to sell, limiting supply and leaving few options for would-be buyers.

Berner said the firm’s original 2025 forecast pegged interest rates to fall to around the low 6% range by the end of the year. The average rate on a 30-year fixed mortgage is currently 6.63%, according to Freddie Mac.

“The walk-in effect has really…