BHGRE 2025: Market Insights

2025 Home Trends: What Buyers and Sellers Need to Know

The real estate market continues to evolve, and homeowners are adapting with fresh perspectives on homeownership, design, and renovations. The Better Homes and Gardens Real Estate 2025 Home Trends Insights Report sheds light on what’s shaping today’s housing market and what buyers and sellers should expect in the year ahead.

Homeownership: Still the Best Investment

Despite economic uncertainty and fluctuating interest rates, Americans remain firm in their belief that homeownership is the best long-term investment—ranking higher than stocks, gold, or cryptocurrency. However, many are cautious about making mistakes in what is often the biggest purchase of their lives.

Affordability Challenges and Interest Rates

Affordability remains a significant hurdle for many buyers, with the primary concerns being high home prices and rising mortgage rates. While interest rates averaged 6.72% in 2024, experts predict they may settle around 6.4% in 2025. Younger generations, especially Gen Z and Millennials, have a higher tolerance for interest rates between 5-10%, making them more adaptable buyers.

Renovations Over Relocations

With high home prices and rate uncertainty, more homeowners are opting to renovate instead of relocate. They’re looking for cost-effective upgrades that add value to their properties, whether they plan to sell or stay. Popular home improvement projects include:

• Kitchen upgrades: Painted cabinets, new backsplashes, and modernized layouts.
• Bathroom renovations: Updated vanities, fresh flooring, and enhanced storage.
• Fresh interior paint: Neutral colors remain the most desirable, helping homes feel updated and move-in ready.

Changing Design Trends

Home decor preferences vary widely by generation:

• Gen Z embraces maximalism, favoring bold colors, vintage furniture, and layered textures.
• Millennials prefer minimalism, opting for sleek, modern, and Scandinavian-inspired designs.
• Cottage and farmhouse styles continue to be popular, with a significant rise in interest over the past year.

Making Small Spaces Work Harder

With buyers choosing more affordable homes, maximizing small spaces has become a priority. Homeowners are turning basements, garages, and even entryways into functional living areas with DIY projects like:

• Built-in shelving and storage solutions
• Garage-to-office or workout space conversions
• Stylish, multi-functional furniture

The Power of Staging and First Impressions

For those looking to sell, home presentation is key. 81% of real estate agents say buyers want neutral, clutter-free spaces, and 43% say curb appeal is the most critical first impression factor. Sellers should focus on:

• Deep cleaning and decluttering
• Minor repairs and touch-ups
• Enhancing curb appeal with landscaping and fresh paint

What This Means for Buyers and Sellers in 2025

Whether buying, selling, or renovating, today’s homeowners are more strategic than ever. They’re making smart investments in their homes, focusing on affordability, and embracing design trends that make their spaces more functional and inviting.

For buyers, patience and preparedness will be key in securing the right home in a competitive market. For sellers, modern updates and staging strategies will help their homes stand out and sell for top dollar.

If you’re considering making a move or upgrading your current home, staying informed on these trends can help you make the best decisions for 2025 and beyond!

If you’d like to know more details from the full report you can find it here: https://www.bhgre.com/bhgrelife/2025-home-trends-insights-by-better-homes-and-gardens-real-estate/