By Holly Henbest, Realtor
As we look back on 2024, the year started with a sluggish pace in the real estate market. However, by fall, we began to see some momentum as interest rates eased slightly, and many markets leaned heavily in favor of sellers.
So, what might 2025 have in store? While I don’t have a crystal ball, I do have a few thoughts and predictions for the year ahead.
Shuffling the Deck
I anticipate a notable increase in both listings and buyers in the coming year. Buyers seem to have adjusted to the current interest rates and are ready to move forward. Despite higher prices and rates compared with a few years ago, many have realized that waiting may no longer be in their best interest. Home prices continue to rise, and entering the market sooner can offer long-term benefits.
Life events often drive decisions to move, and those events — marriages, growing families, relocations, divorces, or children leaving for college — happen regardless of economic conditions. These transitions naturally lead people to seek homes that better support their changing needs and lifestyles.
I often say, “A home should support your goals, not just be something you support.” Over the past few years, many homeowners have been holding off on making a change, but now they’re ready to prioritize their life goals. This dynamic creates a “shuffling of the deck” in the market, as people list their current homes to move into ones that align better with their aspirations and evolving needs.
Interest Rates & Home Prices
There are promising signs that interest rates may ease slightly in 2025, offering some relief to buyers. However, I wouldn’t recommend waiting for rates to drop to make your buying decision. The reality is that home prices are expected to continue climbing, and the potential appreciation in value may outweigh the benefits of a lower interest rate in the future.
Ultimately, while interest rates can fluctuate and be adjusted later through refinancing, home prices tend to follow an upward trajectory. Delaying your purchase in hopes of a lower rate could mean paying significantly more for the same property down the line. Acting sooner rather than later could provide a better long-term advantage.
Refinancing
Many buyers feel confident that if they purchase a home at a higher interest rate, they can refinance later when rates drop. While this can be a smart strategy, it’s important to remember that refinancing isn’t automatic. You’ll need to qualify.
To ensure you’re in a strong position to refinance in the future, maintain a solid credit score and a healthy financial profile. Be mindful of taking on significant new debts, such as financing a remodeling project, purchasing a new car, or buying furniture, as these could negatively impact your debt-to-income ratio and jeopardize your ability to refinance.
Planning ahead and staying financially disciplined can help you to secure better terms when the opportunity to refinance arises.
Interior Design Trends for 2025
When it comes to interior design, we’re seeing a shift towards warmer, earthy tones that create a cozy and inviting atmosphere. Yellow is making a vibrant comeback, alongside terracotta pinks, soft reds, and rich wine shades like burgundy and merlot. Pantone’s Color of the Year, Mocha Mousse, exemplifies this trend — a deep, chocolate-brown hue with gray undertones that evokes warmth and comfort.
Eco-friendly design is also taking center stage, with a focus on sustainable materials like vegan leathers, non-toxic finishes, and repurposed or upcycled furniture and decor.
What’s falling out of favor in 2025? Wallpaper accent walls and “millennial gray” are being left behind as homeowners embrace warmer palettes. Open-concept floor plans are also losing their appeal. With more people working from home, the demand for defined, sectioned spaces is growing. The trend toward privacy and comfort is reshaping homes to include cozy, distinct areas rather than wide-open layouts.
As we step into 2025, the real estate market and home trends continue to reflect the dynamic ways people live, work and grow. Whether you’re buying, selling or simply refreshing your space, it’s clear that adapting to changing needs and priorities is key.
The market may hold its surprises, but one thing is certain: real estate remains a powerful way to invest in your future and create a home that truly supports your lifestyle. If you’re considering a move or a change, now’s the time to make thoughtful decisions and take advantage of the opportunities this new year will bring.
Here’s to 2025! May it be a year of growth, comfort, and new beginnings in real estate and beyond!
Holly has been a Desert Ridge resident since 2000 and has been a Realtor since 2006. She is the leader of The Henbest Team with Realty One Group. Holly is ranked in the top ½ of 1 percent of Realtors in Arizona and is a certified luxury marketing expert. She has been ranked #24 in the Top 50 Realtors by the “Phoenix Business Journal” for the past several years and recognized by “So Scottsdale!” magazine as a Real Estate Superstar for 2019, 2020 and 2021. She’s also been the #1 ranked realtor at Realty One Group/North Scottsdale for the past several years. Learn more at henbest.com.
