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Planning to buy a home in 2025? Congratulations! Now comes the fun part: preparing yourself financially, mentally, and emotionally for the wild ride of the housing market.

With interest rates still doing their best roller coaster impression and new regulations on the horizon, here’s a breakdown of how to get yourself ready to snag a home next year, according to global real estate advisor Jenna Stauffer of Sotheby’s International Realty.

1. Assess your financial readiness

Before you even start scrolling through online listings, take a hard look at your finances. According to Jenna Stauffer, the first step for buyers is to connect with a lender — and don’t stop at just one. Comparing options from several lenders to find the best mortgage lenders will give you a clear understanding of your buying power.

Budgeting for a home is about more than just saving for a down payment. You need to account for closing costs, moving expenses, insurance, and potential repairs or renovations. Stauffer recommends keeping your monthly mortgage payment at or below 25% of your take-home pay to stay on solid financial ground.

“Pre-approval is more than a box to check — it’s your ticket to showing sellers that you’re serious,” Stauffer said. “It also helps you avoid falling in love with a home that is outside your budget.”

And don’t forget an emergency fund. Stauffer advises setting aside three to six months of living expenses to ensure you’re financially ready to act quickly when the right home becomes available.

2. Monitor interest rates

Interest rates are still unpredictable, and Stauffer predicts they’ll remain volatile in the short term. But don’t let fluctuating rates paralyze you.

“The perfect time to buy is when the home fits your needs, budget, and long-term goals — whether rates are up or down,” Stauffer explained. If you find the right home, don’t hesitate. You can always refinance later if rates improve.

Stay in regular communication with your lender to track the best mortgage rates trends and explore tools like rate locks or buy-downs to keep payments manageable. Acting when you’re financially ready will make a significant difference in affordability.

3. Interview real estate agents

Real estate is local — hyper-local. That’s why Stauffer insists on finding an agent who knows your market inside and out. Start by interviewing several agents to find someone who aligns with your needs and understands the nuances of your area.

Due to recent changes in National Association of Realtors (NAR) policies, you must sign a buyer’s broker agreement before an agent can show you homes. Stauffer suggests reviewing this agreement carefully — consider having an attorney look it over for peace of mind.

While many sellers still cover buyer’s agent commissions, some don’t, so discussing costs upfront with your agent is essential. Open communication can prevent unpleasant surprises down the line.

4. Understand market dynamics

Housing markets aren’t one size fits all. Some areas lean toward buyers, while others remain competitive seller’s markets. Stauffer emphasizes the importance of staying informed about your local market trends.

For instance, you may have more room to negotiate if inventory is rising. Understanding where your market stands helps you recognize opportunities and make strategic decisions. Stauffer’s advice? “Stay on top of trends and know where your market stands.”

5. Stay informed about policy changes

With a new administration taking office in 2025, housing policies and tax laws could change, potentially impacting your buying power. Stauffer recommends keeping an eye on these shifts and working with a knowledgeable real estate agent or financial advisor to navigate them effectively. Being proactive about understanding these changes can help you make informed decisions and adapt your strategy if needed.

6. Don’t time the market

If you’ve been holding out for the “perfect” time to buy, Stauffer’s advice is clear: stop waiting. “If the right house comes along that fits your needs and budget, don’t miss out because you think it might be better to wait,” she advises.

Trying to predict market trends often results in missed opportunities. Instead, focus on what works for your lifestyle, budget, and long-term goals right now.

7. Stay realistic about wants vs. needs

Stauffer stresses the importance of separating your “must-haves” from your “nice-to-haves” before starting your search. With affordability challenges still in play, it’s easy to get carried away with wish lists.

“Staying grounded in your priorities will help you find a home that truly fits your lifestyle and budget,” she said. By focusing on your top priorities, you can avoid falling for features that don’t serve your bigger picture.

Buying a home in 2025 may feel like a daunting task, but preparation is your best tool for navigating the process. From assessing your finances to understanding local market dynamics, each step you take now will make the journey smoother.

The key is to stay informed, flexible, and focused on what works for your current and future goals. When the right opportunity comes along, you’ll be ready to make it yours. Ready to get started? Click here to check out our favorite mortgage lenders.

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