The 2025 housing market is shifting, which could bring more opportunities to buyers.

Prices are stabilizing, inventory is growing and competition isn’t as intense as before. So if you’ve been waiting for the right time to buy, this might be your chance.

Here are a few key trends to watch this year.

Increase in Inventory

In previous years, housing inventory was at a low point, meaning there were more buyers than available homes. This imbalance drove up prices and made competition fierce, but more homes are starting to hit the market — giving buyers more options.

One reason for this shift has been an increase in new construction, as builders ramp up efforts to meet demand. Additionally, some homeowners with ultra-low mortgage rates may now be willing to sell due to life changes, job moves or financial needs.

Even though mortgage rates and home prices have dipped slightly, they are still higher than a few years ago. As a result, some would-be buyers are holding off too, reducing demand and lowering pending home sales.

This change in behavior is giving current buyers more breathing room. With increased inventory and fewer competing offers, they can take their time.

Less Frantic Buying Behavior

With more inventory and demand cooling off, some buyers are less likely to find themselves in the middle of bidding wars.

A bidding war occurs when multiple buyers compete for the same home, often driving the price higher. This can cause a fast-paced situation where buyers feel pressured to make quick decisions, sometimes paying above asking price. But as more homes become available and demand slows down, the market becomes less competitive.

If sellers aren’t getting attention or traction on their listing, they might have to lower the asking price. This presents an opportunity for buyers to pay less for a property.

And with less competition, buyers have more room to negotiate other things like seller-paid closing costs or upgrades.

Affordability Challenges Continue

While interest rates and home prices are becoming more favorable, affordability remains an issue.

In some markets, home prices still outpace the average income, making it difficult for many buyers to afford a home. Even with lower rates and reduced prices, buying a home could require allocating a large portion of take-home pay to the mortgage, which might be unsustainable for some buyers.

However, it’s still possible for many to buy a home, especially with the help of cost-saving programs designed to make homeownership more accessible. For example:

1. Temporary Buydowns

FirstBank’s temporary buydown programs allow homebuyers to pay a lower mortgage rate for the first one to three years of the loan term. After this period, the permanent rate takes effect. This results in a lower initial mortgage payment, making it more affordable in the early years of homeownership.

2. Zero Down Home Loans

There’s also the option of zero down loans, which are especially helpful for first-time homebuyers. These loans eliminate the need for a down payment, which is one of the biggest obstacles to homeownership. With zero down loans, buyers can purchase a home with little to no out-of-pocket cash, making the dream of homeownership more achievable.

3. Down Payment Assistance Programs

For those who may not qualify for zero down loans, another option is a down payment assistance program. These programs are designed for low to moderate-income buyers and can help cover a portion of the down payment and closing costs. This assistance can make a significant difference for buyers struggling with upfront costs — opening the door to homeownership when it might otherwise seem out of reach.

This year could be the year homebuyers make a strong return to the market. If you’re ready to take the next step toward homeownership, reach out to the loan experts at FirstBank Mortgage. They’re ready to help you understand your options and guide you through the process.