Homebuyers

Is Buying a Home a Smart Financial Decision in 2025?

As more homes go onto the market and sellers are increasingly cutting price tags, many potential homebuyers are wondering whether to make a move now—or wait for a better deal.

On one hand, those who wait may be able to snag a lower mortgage rate or find a seller willing to help them with closing costs. However, they may miss out if homeownership becomes more expensive.

Despite affordability concerns, buying a home still confers long-term advantages such as the chance to build equity—instead of enriching landlords.

Today’s buyers can also take advantage of a sluggish market by leveraging their negotiating power to snag seller concessions and other perks.

“Buying a house is still a smart investment,” said Ali Wolf, chief economist for residential construction data provider Zonda and home search site NewHomeSource. “Plus, buyers have negotiating power today in many housing markets.”

Property values continue to increase

The headlines have focused on how home prices are coming down in certain parts of the country. But in others, home prices are still appreciating, albeit more slowly than during the record gains of the pandemic era.

Home prices rose by 1.8% year-over-year as of May 2025, with an increase of 4.2% projected in the year to come, according to real estate data firm Cotality.

“We expect home prices to continue to rise in the Midwest and Northeast,” Wolf said. “While many top markets along the West Coast are still limited by [a lack of homes for sale,], we still expect home prices to come down marginally. Over the next 12 months, we expect to see prices flat to down across high-growth, high-supply Sun Belt markets.”

And in the long term, investing in real estate remains a proven wealth-building strategy.

Homebuyers save with concessions

In a slower housing market, sellers may be more likely to cut prices, repairs, and concessions. Seller concessions are when they offer to cover all or part of your closing costs or temporarily or permanently buy down your mortgage rate to sweeten the deal.

In some markets, buyers may offer less than the asking price and still have their offers accepted.

In addition, buyers may be able to put contingencies in their offers, such as for home inspections and appraisals to ensure the home is in good shape and valued fairly. This may result in long-term savings for buyers.

However, this won’t work for every home. Properties with multiple offers are still going above the asking price with waived contingencies even in slower markets.

Falling mortgage rates can lead to higher prices and bidding wars

While mortgage interest rates have remained elevated, many real estate professionals expect rates to come down a little this year.

If that happens, competition may spike as more buyers look for homes. This could lead to higher prices and bidding wars.

Buying now means potentially avoiding those pitfalls. And for buyers worried about missing out on lower interest rates in the future, refinancing remains a viable option to secure lower monthly payments without re-entering a competitive market.

Homeownership offers financial advantages

Unlike renting, owning a home allows you to build equity with every monthly payment and stabilize your housing costs.

“If you buy today, you can start investing in your own financial success versus paying off someone else’s investment with renting,” Wolf said.

Consider personal circumstances along with the current housing market

Ultimately, the decision to buy a home depends on personal circumstances. This includes your job stability, finances, timeline, and family considerations.

If you need additional space for a growing family, it might be the right time to move from an apartment to a larger home if you can afford it. 

While no two buyers are the same, experts agree on one guiding principle: the best time to buy a home is when you’re ready—not just when the market seems ideal.

“The big thing with many investments is not trying to time the market,” Wolf said.