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Homebuyers and housing experts have tried to remain optimistic about the direction of the U.S. housing market, but the lack of significant improvement in affordability has left people feeling weary.
Overall, 92% of people who would like to own a home said they were at least somewhat stressed about buying one in 2025, according to U.S. News & World Report’s third annual Homebuyer Sentiment Survey.
The survey — which collected responses from 1,200 Americans nationwide who are planning on buying a home this year using a mortgage — said these feelings are primarily a result of how expensive housing has become, especially over the last five years or so.
So how do homebuyers feel about the current housing market, and what would need to happen for them to buy a home this year? Here’s what they said, according to the survey.
Buyers are waiting for mortgage rates to come down
A majority of the homebuyers surveyed — about 80% — said they are waiting for mortgage rates to come down before buying in 2025. This is similar to the 76% who said they put off buying a home last year due to mortgage rates.
With that, 18% said they’re waiting for rates to drop below 6.5% while 27% said they’re waiting for rates to drop below 6%. Additionally, 30% said they’re waiting for rates below 5.5% and 25% are looking for rates below 5%.
“About half of homebuyers (48%) are willing to wait between three and six months for mortgage rates to fall, but as of this writing, rates aren’t supposed to dip below 6% in that timeline,” the survey reads. “For the 36% of those who are willing to wait more than six months, that patience might pay off, but it may not: Forecasting mortgage rates is incredibly difficult even for economists, let along the average homebuyer.”
When asked to describe their local housing markets, many homebuyers used words like “unpredictable,” “expensive,” “confusing” and “bad.” With this, 37% said they think their local market is more likely than others to worsen over the next three years, while 28% said their local market is less likely to worsen. And about 27% said their market is about the same as others.
Despite this perception on a local level, about 57% of respondents said they believe the greater housing market will improve in 2025, but 26% said they believe it will only get worse.
Homebuyers concerned about climate risks
Because of the several major natural disasters that took place across the nation over the last year or so, about 63% of homebuyers said that climate risks were a factor they considered when deciding on where to purchase a home.
Similarly, 46% of respondents think they will struggle to find affordable home insurance due to climate risks, while 40% think the opposite and 14% said they don’t know.
Maddie McGay is the real estate reporter for NorthJersey.com and The Record, covering all things worth celebrating about living in North Jersey. Find her on Instagram @maddiemcgay, on X @maddiemcgayy, and sign up for her North Jersey Living newsletter. Do you have a tip, trend or terrific house she should know about? Email her at MMcGay@gannett.com.
