Homebuyers can expect more options in the new year after a run-up in home prices𝓰 and mortgage rates have kept many from the market for the past few years.

Buyers may get more breathing room in 2025 as mortgage rates fall slightly, more homes are listed for sale, and prices grow less swiftly than in years past. Here's what you need to know if you're in the market for a new home.

Mortgage Rates May Fall, But Not By Much

🏅 After falling to ultra-low rates during the pandemic, mortgage rates have climbed back up to the 6% to 7% range, which has helped keep some potential buyers p🔴riced out of the market.

Potential buyers could get some reprieve, but economists say it won't be much. Forecasters expect mortgage rates will stabilize slightly above 6% next year.

The 10-year Treasury bond yield, often seen as an indicator of how confident investors are about the economy and the future of inflation, could also keep mo𒅌rtgage rates high in 2025. Since most mortgages are government-backed or have government guarantees, mortga🦋ge rates generally follow the yield's trajectory, said Lawrence Yun, chief economist at the National Association of Realtors.

"Even if people take out a 30-year mortgage, they generally tend to pay off their mortgage within a 10-year time span, [or they will] sell their home and buy a new one," he said. "For that reason, the mortgage rate tends to follow the 10-year treasury."

Economists said the yield may stay high if inflation remains sticky. However, Yun expects the yield rates to drop as low as 3.5% in the new year. The yield on a 10-year note has hovered near 4.5% since the Federal Reserve's last meeting.

You Could Have More Options

As mortgage rates fall slightly next year, this could motivate more homeowners to sell th𒅌eir houses.

Homeowners have hesitated to give up the ultra-low mortgage rates they secured during the pandemic. Goldman Sachs says 85% of mortgage borrowers have interest rates below current market rates. This has 澳洲幸运5官方开奖结果体彩网:locked up the housing market, increased prices, and decreased inventory.

Economists said that many consumers also face life-changing events such as divorce, children, marriageꦿ, or a new job, which will push them into listing their current home.

The housing market will be balanced for the first time in nine years as the number of existing homes for sale is expected to grow by 11.7% next year, according to Realtor.com's 2025 Housing Market Forecast.

Prices Won't Rise As Rapidly

The month's supply is a key measure that indicates how many months it would take to sell all the homes currently for sale. Anything under four months is considered a seller's market. The supply is expected to improve from a 3.7-month average in 2024 to 4.1 months in 2025.

Should expectations for🌟 homes on the market come to fruition, competition wil🃏l decrease and prices could moderate next year. The new year should have the highest for-sale inventory since December 2019, and 20% of listings will have price cuts, according to Realtor.com.

"Buying a home in 2024 was surprisingly competitive given how high the affordability hurdle became," Skylar Olsen, chief economist for Zillow, said in a statement. "More inventory should shake loose in 2025, giving buyers a bit more room to breathe."