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Dec 23, 2024 PropStream

2025 Housing Market Predictions: What Are Homebuyers Looking For?


Disclaimer: PropStream does not offer investing advice or make any profit promises. This article is for educational purposes only. We recommend doing your due diligence and/or consulting financial professionals before working as a real estate agent.


  Key Takeaways:

  • Millennials will likely remain the largest homebuyer generation in 2025, making them a key focus for real estate agents.
  • Homebuyers with above-average household incomes may continue to dominate the market, emphasizing the importance of focusing on high-earning clients.
  • Agents should prioritize homes between 1,600 and 2,999 square feet while staying attuned to design trends such as cozy spaces and climate resilience.

As a real estate agent, you match homebuyers with sellers. But to do this, you must first understand what buyers seek.

Read on to learn the biggest housing trends driving homebuyer demand in 2025 so you can better serve your clients and close more deals.

Millennials Are the Biggest Homebuyer Generation

According to a 2024 report, millennials have reclaimed their position as the top U.S. homebuyer generation. They went from representing 28% of homebuyers in 2023 to representing 38% in 2024. Meanwhile, baby boomers’ share fell from 39% to 31%.

Here’s a complete list of homebuyer generation shares from oldest to youngest:

2025 housing market predictions

As we enter 2025, millennials will likely maintain the highest share of homebuyers while baby boomers’ share continues to fall and Generation Z’s share continues to grow.

As a result, agents would do well to focus on marketing to and serving millennial homebuyers (those between ages 29 and 44 in 2025) while keeping an eye on Gen Z buyers (the oldest of which will turn 28 and enter prime homebuying years).

Most Homebuyers Earn Above-Average Household Incomes

Between July 2023 and June 2024, 74% of buyers financed their home purchase, including 91% of first-time buyers and 69% of repeat buyers. This means most homebuyers’ budgets will depend on their incomes and mortgage rates.

In 2023, the real median household income was $80,610. Meanwhile, the average 30-year mortgage fixed rate is 6.6% (as of 12 December 2024). Assuming the median buyer puts down $26,000 (the median down payment in Q1 2024), their house budget without closing costs would be $234,521—not much, considering the median home value was $420,400 in Q3 2024.

That’s why the median household income among actual homebuyers is well above the median household income for all Americans: $108,000 for typical homebuyers, $97,000 for first-time buyers, and $114,300 for repeat buyers in 2023. Meanwhile, a record 26% share of homebuyers bought their homes with all cash.

Moving into 2025, agents should focus on serving clients with above-median household incomes. Even if American earnings grow and mortgage rates fall, your potential homebuyer pool is unlikely to expand much into lower-income classes (especially if purchasing power gains are offset by higher home prices).

The Median Homebuyer Wants a 2,067 Sq. Ft Home

According to a 2023 survey, buyers want homes with a median of 2,067 square feet (SF). Here’s a full breakdown of the survey results:

2025 housing market

This means most agents should focus on homes between 1,600 and 2,999 SF—the size that 59% of homebuyers prefer and that 62% of new single-family homes started in 2023 were.

That said, if you specialize in 3,000-3,999 SF homes, understand that single-family home construction for this size exceeds demand. In contrast, construction for 1,200-1,599 SF homes falls short of demand—likely since the supply of existing home stock in this size is greater.

In other words, agents may want to propose buying an existing house for clients interested in 1,200-1,599 SF homes or buying a new house for those interested in 3,000-3,999 SF homes.

5 Most Popular Home Designs and Features

A recent study of online home listings in 2024 shows five emerging trends across popular home designs and features:

1. Electric Features

More buyers are prioritizing sustainable and environmentally friendly home features. For example, property listings that mention whole-home batteries surged 62% since last year, while “solar panels” appeared 18% more often.

2. Cozy Vibes

While “cozy” used to be a negative euphemism for “small,” it’s now a sought-after trait. Listings mentioning “cozy” have increased 35% since last year as more buyers prioritize cozy dens and dining rooms over sizeable open floor plans.

3. Vintage Style

Floral patterns, tapestries, antique furnishings, and chintz are making a comeback. Listing mentions of “vintage” are up 9%. Meanwhile, bibliophilic decor and home libraries are up 22%, and second kitchens and back kitchens are up 8%.

4. Climate Resiliency

As natural disasters increase, more homebuyers are prioritizing climate-protection features. Of recent homebuyers, 86% said it’s very important that a home has at least one climate-resilient feature, such as flood barriers, water catchment systems, or drought-resistant turf yards.

5. Spa-Inspired Wet Rooms

A wet room combines a shower and bathtub into one waterproof space. It’s most often found in luxury hotels, but it’s increasingly appearing in homes as homeowners prioritize their wellness. Home listings that mention wellness features are up 16% since last year.

10 Hottest Housing Markets

A recent study of the largest 100 U.S. metros revealed the top ten markets poised to be the leaders in home sales and price growth in 2025. Here are the results:

2025 real estate market

All ten of the hottest housing markets in 2025 are located in the South and West, with multiple in three states: Texas (El Paso and McAllen), Florida (Miami and Orlando), and Virginia (Virginia Beach and Richmond).

Agents eager to enter a new market may want to consider working in these cities since their higher potential home sales volumes and appreciation rates may lead to higher and more frequent commissions.

Use PropStream to Find 2025 Opportunities

The most successful real estate agents not only cater to the latest homebuyer preferences but leverage tools to work more efficiently.

Enter PropStream. Our platform lets you search over 160 million properties nationwide with over 165 search filters. Plus, our new AI property condition score feature lets you narrow results by the quality of specific home features: exterior, interior, kitchen, and bathroom. That way, you can target homes that match your clients’ tastes.

Prepare to Tackle the 2025 Housing Market—Add PropStream To Your Tool Belt for 7 Days Free!

Now with AI-powered data via our PropStream Intelligence™ platform, PropStream is your all-in-one resource for finding the best opportunities and turning them into new business in 2025.

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Frequently Asked Questions (FAQs)

Which generation will have the most homebuyers in 2025?

Probably millennials. They represented 38% of homebuyers in 2024, and their share of homebuyers is unlikely to shrink much (if at all) in 2025.

How much will the typical 2025 homebuyer earn?

In 2024, the median household income for the typical homebuyer was $108,000. That figure is likely to increase in 2025. 

What is the most popular home size among homebuyers?

The most popular home sizes among homebuyers in 2023 were 2,000-2,999 SF (38% of homebuyers) and 1,600-1,999 SF (21% of homebuyers). 

What home design trends are driving buyer demand in 2025?

In 2025, buyers are prioritizing sustainable features like solar panels, cozy and intimate spaces, vintage decor, climate-resilient elements, and wellness-focused amenities.

Which housing markets are expected to grow the fastest in 2025?

The hottest three markets in 2025 are expected to be Colorado Springs, CO; Miami, FL; and Virginia Beach, VA. 

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Published by PropStream December 23, 2024
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