Heading into March 2025, potential homebuyers are facing significant challenges such as high mortgage rates, rising home prices and inflation. Additionally, factors like the threat of tariffs further complicate the market, creating more obstacles for buyers.
Why It Matters
The housing market is experiencing significant fluctuations, with interest rates remaining high and inflation impacting affordability. These factors have broader implications for potential homebuyers, influencing their ability to secure favorable mortgage rates and find affordable homes. External factors, such as tariffs on key materials, could also drive up housing costs, further complicating the market for buyers.
Despite these challenges, there are opportunities for those who navigate the current conditions strategically.
What To Know
The current housing market presents both opportunities and challenges for potential buyers. Mortgage rates remain a pivotal factor for buyers and have remained high, which had led to a decrease in mortgage applications to start the year, as buyers were hesitant to commit to higher monthly payments.
However, the Mortgage Bankers Association predicts that rates will gradually decline from 7 percent to 6.4 percent throughout 2025 and remain around 6.3 percent for 2026. With rates currently sitting at 6.75 percent, some buyers will want to take advantage of the recent decrease in rates, while others may choose to wait for further rate reductions before committing.
In recent months, the U.S. housing market has experienced a slight uptick in inventory. This can mean more options to choose from, potentially reducing competition for each home. Zillow forecasts a 0.9 percent home value growth in 2025, indicating a relatively slow pace. This modest increase suggests that as more homes are becoming available, prices will rise at a slower rate.
A Reuters poll suggests that housing affordability may see modest improvement this year, primarily due to anticipated interest rate cuts rather than an increased supply of homes. This implies that while financing may become slightly more accessible, the limited housing supply continues to pose challenges.
Experts note economic conditions and policy decisions are also key factors to influencing the housing market. Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek that high interest rates and inflationary pressures are making it difficult for people “to save for a down payment,” which makes homeownership more challenging.
Both Beene and Kevin Thompson, founder and CEO of 9i Capital Group, recognize the impact of external factors, such as tariffs, on housing costs. Beene warns that tariffs could drive up prices by thousands of dollars and Thompson emphasizes how rising material costs will force builders to pass those increases onto buyers. Ultimately, both suggest that the housing market in March will remain difficult for buyers.
Despite these challenges, there are still opportunities for buyers who are willing to navigate the current market conditions. The Texas Real Estate Research Center told Newsweek buyers who have flexibility in negotiations or the ability to walk away from unfavorable deals will benefit most from shifting market conditions.
Beene suggests homebuyers looking for new homes might benefit the most. He notes new home builds are being offered at more aggressive pricing, as these properties started production when housing was easier to move. And Thompson notes cash buyers have an advantage, as they do not rely on banks and have more pricing power in any market.
What People Are Saying
Alex Beene, financial literacy instructor for the University of Tennessee at Martin, told Newsweek: “The only type of buyer that may find value in the current housing market is one who can find a good deal and is willing to tolerate higher interest rates for a period of time before they start to decline. We are seeing some new builds with more aggressive pricing in many real estate markets, as these properties started production at a time when housing was easier to move. While it’s still not the best time to buy, finding a new build at a lower price and promotional interest rate is the way to go until the broader market gets more financially reasonable for buyers.”
Kevin Thompson, founder and CEO of 9i Capital Group, told Newsweek: “Cash buyers will always have an advantage—especially now. They don’t rely on banks, giving them more pricing power in any market. Meanwhile, the 10-year yield has dropped by about 40 basis points, pulling mortgage rates down with it. If you expect rates to rise again, now may be the time to lock in a lower mortgage rate.
On the flip side, if you believe the economy is slowing, waiting could be the smarter move. Market uncertainty may bring down natural interest rates further, leading to softening prices in the months ahead.”
The Texas Real Estate Research Center told Newsweek: “Buyers with flexibility, those who can take their time to negotiate a good price or simply walk away from a less attractive offer, are the ones who will benefit a lot from shifting market conditions. Even those who are pressed to find a house to buy, are in a better position to negotiate with the seller on price or non-price concessions.
Buying a home is an extremely personal decision and should be based on the buyer’s circumstances like cashflow and job stability. Also, many people enter the market from major life changes like marriage, growing or shrinking families. These and other factors determine whether it is a good time to buy.”
What Happens Next
While the current housing market presents challenges, there are still opportunities for buyers who are willing to navigate the complexities. Looking ahead, potential homebuyers should monitor economic indicators, including Federal Reserve policies and potential tariff implementations, as these factors could influence mortgage rates and housing prices.
The post Should You Buy a House in March? Experts Weigh in on Housing Market appeared first on Newsweek.
