Kate Wood, Naldwarette
Want to buy a house in 2025?
You’re not alone: According to a survey commissioned by Nerdwallet and conducted online by Harris Poll in November 2024, 15% of Americans are planning to buy a home in the next 12 months. It’s the best share since I first asked that question in 2019. That would be around 39 million people.
Not all of these plans are pan-out. According to the National Association of Realtors, 4.06 million existing homes were sold in 2024. This is because it has been the lowest sales since 1995. That number does not include new construction. According to the US census, around 1.63 million new homes were built in 2024. If stock remains at around 6 million this year, there could be more than six interested buyers in each home for sale.
With so few listings, it is wise for home buyers to make their home search as wide as possible. “If you’re searching in a market with limited stock, it’s important to focus on what’s really important,” says Jenna Staufer, a real estate broker with Ocean Sotheby’s International Realty in Key West, Florida. explains. “Defines non-negotiable capabilities, location, number of bedrooms and bathrooms, area, key features, and make them flexible for the rest.”
Conditions are one of the areas where there is flexibility. NAR statistics show that in 2024, 23% of home buyers were breached on condition. It calls for a reminder of a home that needs work, but you could also consider building a newer home than an existing one and an existing one. There are mixed opinions about the auxiliary equipment, whether to buy or build a home. Here are some things you need to know about each when determining the scope of your home search:
Buy a turnkey house
Top: All you need to do is, of course, go through the entire home viewing process of making successful offers, getting a mortgage and closing at home, and then keeping things moving. Turnkey Home also allows for the most diverse funding options. You don’t need to look for niche loan types, so you can compare more mortgage lenders and focus on finding the best loan offers.
Disadvantages: Existing homes with chip top shapes are faster due to very low inventory in the market. You are more likely to face competition, or perhaps a bid war, and you are less likely to make a deal. According to NAR, a third of the houses sold in 2024 were sold at the asking price, with 23% being sold above.
Pro Tip: Take crucial action to get a turnkey home. “Check the boxes you need for property and if you’re financially ready, be prepared to make an offer quickly,” Stauffer says. Get pre-approval for your mortgage and make sure you know the contingencies your real estate agent is happy to provide to your budget and the seller. If your home sells listing prices regularly in your area, focus your search on properties that are slightly below what you actually use.
Building a new house
Benefits: A new home built for you will likely be shorter searches and less competition, so skip some steps in the purchasing process. If you are working with an independent contractor, you can select all the last details. Even if you have purchased development, you can still make calls via layout, surfaces, etc. Another perk for the new development: Builders provide incentives such as upgraded amenities and interest rate buyouts, helping your budget move further.
Disadvantages: New construction timelines can derail your journey, as they may require flexibility on the day you travel, as they can be derailed if you have problems finding materials or labor. Whether or not it costs to buy or build a house is also an open question. Buying in development can be relatively economical or at least comparable to buying an existing home, but may limit location options. Buying land and starting from scratch can mean additional costs to ensure access to water, electricity and other utilities. According to the National Association of Home Builders, in December 2024, the median price for new construction homes was $427,000. According to NAR, the median price for an existing home was $404,000.
Pro Tip: Understand your fundraising options. If you are building a home, you will need a construction loan to fund both the building stage and the completed home. Construction loans may require a higher descent, and depending on the type of loan, the lender may need to approve the builder or have some degree of oversight on the project. It’s easier to fund your home with development as the builder covers the construction costs. However, you may need to pay a builder deposit in addition to your down payment. Builders may offer you fundraising, but you will want to compare their interest rates and terms with other lenders.
Fixer Upper Renovation
Benefits: If you buy a home that requires some work, you may be able to afford real estate in a larger or desirable area than your budget allows. “This is what you’ll probably find the most opportunity as long as you know your numbers. You can also renovate your home to customize it to your needs and style, or to provide energy-efficient upgrades. You can create and save the unique charm and character of the home.
Disadvantages: Renovations are much more difficult, more troublesome and take longer than they’re seen on TV. Whether you’re hiring a strength or working on your own, you’ll probably spend a considerable amount of time and money after closing day. “One of the main things that matters to be aware of is whether it really costs money to do this job. “Can I do most of the renovations before moving in, or I’m not sure if I have to do the time. Is it something you’re trying to do over time?” If your home is unable to live, you may need to keep multiple housing situations under control. Even if it is possible, you can withstand the inconvenience and discomfort as you wait for the project to close.
Pro Tip: You know what you’re into. Work with experienced home inspectors to determine what needs to be addressed. You can also do walkthroughs with the contractor. This could give you more specific ideas about the scope of the work and potential costs. Most contractors will charge a consultation fee that will be refunded if employed. You may consider financing your purchase with a renovation loan, a mortgage that covers the cost of repairs and the price of your home.
Kate Wood writes for Nald Wallet. Email: kwood@nerdwallet.com.
