By Abby Badach Doyle, NerdWallet

It won’t be impossible to buy a house in 2025 — just be prepared to play on hard mode.

According to a November 2024 report from ICE Mortgage Technology, the monthly principal and interest payment on an average-priced home is $2,385. While that’s not the highest it’s ever been, it’s still a sharp increase — nearly 80% — from just three years ago. In November 2021, when mortgage rates averaged 3%, the monthly principal and interest on an average-priced home was $1,327 per month.

So here’s the key to buying in 2025: Look ahead, not back. Regret won’t help you budget for today’s new normal.

And with this year’s election also in the rearview mirror, so is some uncertainty among buyers and sellers that historically slows the market during every presidential election cycle.

“People have just been kind of sitting waiting to see what’s going to happen,” says Courtney Johnson Rose, president of the National Association of Real Estate Brokers, an industry group for Black real estate agents. “I’m hopeful that the new year will bring more attention to real estate, more excitement to real estate, and more opportunities for first-time home owners to get in the game.”

Check the forecast

Preparing to buy a house is a lot like dressing for the weather. It’s easier when the outlook is sunny — but with some planning, you can gear up to face any condition. Here’s what housing market experts are forecasting for the upcoming year.

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First, home prices: We’ll likely see more modest growth in 2025, a change from skyrocketing prices in recent years.

After 16 consecutive months of year-over-year price increases, the median existing-home sales price hit $407,200 in October, according to the National Association of Realtors. In 2025, with more supply trickling in to temper price increases, NAR chief economist Lawrence Yun forecasts a median existing-home sales price of $410,700, up just 2% over this year.

Next, housing inventory: Demand still outpaces supply. While we don’t expect a return to a buyer’s market, competition should be less cutthroat. Realtor.com forecasts a balanced market in 2025 with an average 4.1-month supply of homes for sale, up from an average 3.7-month supply so far in 2024. That would make 2025 the friendliest market for buyers since 2016, which had an average 4.4-month supply.

Finally, mortgage rates: After topping 8% in October 2023, the 30-year mortgage rate has slowly eased into the 6.5%-7% range this year. Rate cuts from the Federal Reserve have helped nudge that downward. Despite earlier optimism, forecasters’ latest consensus is for rates to effectively plateau above 6% throughout 2025.

That said, every year has its wild cards. In 2025, it’s still uncertain how President-elect Donald Trump and a Republican-led Congress might shake up regulations and tax policies that affect the U.S. housing market.

Set a budget

National forecasts don’t analyze what matters most: Your personal cash flow. To get ready to buy, first meet with a financial advisor or use an online calculator to determine how much house you can afford. You can also get free or low-cost advice from a housing counselor sponsored by the U.S. Department of Housing and Urban Development (HUD).

Next, look into down payment and closing cost assistance from state housing finance agencies, local governments, nonprofits and mortgage lenders. Your employer or labor union might offer assistance, too. First-time buyers with income below their area median have the most options, but repeat or higher-income borrowers can qualify for some programs as well.

“I think that there’s a lot of free money being left out there,” Rose says.

Find a buyer’s agent

Your not-so-secret weapon for buying in 2025 just might be an experienced buyer’s agent.

“Anybody can write a contract,” says Sharon Parker, associate broker with Tate & Foss Sotheby’s International Realty in Rye, New Hampshire. “But you need somebody who’s seen the market, the ups and downs, who knows how to get creative because every transaction is different.”

Following a settlement with the NAR, buyers can now negotiate their agent’s compensation up front. (Previously, home sellers took on that task.) While new norms are still shaking out, Rose says she hasn’t seen too much drama since the change took effect in August.

“So as long as buyers remember that we have to talk about this in the beginning of our relationship, everything typically works out fine,” she says.

Shop and negotiate

Finally, it’s time to shop for a mortgage. To get the best interest rate, get a quote with at least three different lenders. You could also delegate the shopping to a mortgage broker, who can compare quotes and even negotiate a lower rate on your behalf. Though brokers charge a fee, their access to more mortgage options and lower rates can often mean net savings overall.

With a mortgage preapproval in hand, it’s go time. And you don’t have to wait until spring: If you’re ready to buy now, buyers have less competition and more negotiating power from December through February, so you could snag a deal.

“The people who are selling and the people who are buying in the off season are very serious,” Parker says. “They’re not just lookie-loos.”

However, lower inventory means fewer choices for buyers. So start your search prepared to compromise — a “good enough” house will still help you build equity.

Should you buy a house in 2025?

If a down payment or monthly mortgage payment is financially out of reach, there’s no shame in postponing your search to pad your savings. And owning a home isn’t the right lifestyle choice for everyone, with the ongoing commitment of money and time. But once you’re ready to buy — whether for the first time, or to upgrade or downsize — avoid the trap of waiting for a dip in mortgage rates.

“Nobody can predict what the market, or the world, is going to do,” Parker says. “There is no better time than right now.”

Mortgage rates will always fluctuate, and if they drop significantly, you can refinance. For first-time buyers, homeownership is a major financial glow-up — and the sooner you jump in, the longer you’ll have to build home equity.

“Time value of money is really, really critical when it comes to real estate,” Rose says. “So I would always encourage somebody to buy as soon as you can and get the clock ticking.”

Abby Badach Doyle writes for NerdWallet. Email: abadachdoyle@nerdwallet.com.

The article Buying a House in 2025: Your How-To Guide originally appeared on NerdWallet.