Military members selling and buying homes in 2025 are in for an interesting year. The real estate market has calmed down since the pandemic mayhem. However, stabilizing interest rates and a somewhat less tight inventory will break the real estate juggernaut of 2023 and 2024 and put the buying and selling game back in motion. Renters, you’ll likely see more of the same trends from the past couple of years.
Some unknowns could affect experts’ 2025 trends, including possible interest rate changes, tariffs, tax cuts, and deregulation. All of these factors could affect home buying and selling in multilayered ways. For now, you can start your home buying, selling, and renting journey by keeping an eye on these trends.
Key 2025 Real Estate Trends
- Stabilized, but not likely lower interest rates.
- Larger, but not an overflowing pool of housing inventory, equaling rising home sales.
- Untraditional purchasing power: all-cash buyers and multi-generations combining incomes.
- Home sellers adjust to less dominance in the home buying process.
- Renters enjoy stability and slightly increased buying power.
1. Higher Mortgage Rates: The New Normal
For those of you patiently waiting for the return to the good old days of 2% or 3% mortgage rates, it's time for a new home buying strategy. Many real estate experts believe the rate will stay above 6% in 2025 and likely in 2026. For context, the mortgage rate range in 2024 peaked at 7.4% and dipped to only 6.08%. Some military home buyers might receive slight rate relief if they find a skilled VA loan lender with excellent credit.
The Federal Reserve projected further interest rate reductions throughout 2025; however, it is not expected to go below 6%. Wild card factors could lower mortgage rates in the future, like the easing of local housing restrictions that block homebuilders and an influx of lower-wage labor force, but these scenarios are unpredictable.
2. VA Loan Buying Power: What to Expect in 2025
Military homebuyers who want to use their VA loan will find their buying power expanded in 2025. Although the VA hasn’t issued their numbers for 2025 limits yet, they likely will match the Federal Housing Finance Agency’s conventional loan numbers. Here’s a quick look:
- One unit home: $806,500
- Two: $1,032,650
- Three: $1,248,150
- Four $1,551,250
High cost-of-living areas:
- One unit home: $1,209,750
- Two: $1,548,975
- Three: $1,872,225
- Four: $2, 326,875
Not sure if a VA loan is for you? Read What Is a VA Loan? to answer your questions.
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3. NAR Class Action Law Suit
Military home buyers should also monitor the VA loan changes from the NAR class action lawsuit. The changes initially put military buyers at a disadvantage because the VA restricted payments for real estate agents, but updates in August 2024 allowed for specific agent-broker fees. This is a temporary safeguard, and the VA continues to monitor the lawsuit’s ripple effect and may make additional adjustments in the future.
In the meantime, the VA recommends that buyers consider negotiating their broker fees and continue to ask the seller to pay closing fees.
Military Home Buyers: Opportunities and Challenges Ahead
First, the good news: real estate forecasters predict increased inventory through 2026, so home shopping won’t be as cutthroat as in previous years. And you might score a slightly lower mortgage rate this year compared to 2024 if your timing is perfect. But, on the flip side, available properties will cost you more. Lawrence Yun, chief economist at the National Association of Realtors, predicts:
- 2025 median home price: $410,700—up 2% over 2024.
- Existing home sales to rise 9%.
- New home sales jump 11%.
Home buyers are managing the high costs in several ways. First, families are pooling their incomes together and creating multigenerational ownership to afford rising costs. Second, families are embracing the “cozy factor” and buying homes with less square footage.
As you know, however, buying a home near a military base has its own challenges, including competition for the best properties and competing with both military and nonmilitary renters who decide it's time to enter the buying pool. Or, if you’re moving to a location without a strong military presence, it might be challenging to find a skilled real estate agent and VA loan home lender familiar with the intricate process.
If 2025 is your year to be a first-time home buyer, Home Buying 101: What You Need to Know Before Buying a Home is the guide you need to understand the process.
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Military Home Sellers: A Changing Market
Home sellers have dominated the home purchase process over the last five years, enjoying the high sale price of homes, thanks to a small inventory and large pool of more than motivated buyers. However, the sales pace slowed down for home sellers over the last year. A small inventory increase coincides with homeowners being unable to postpone selling houses due to life events requiring relocation.
Luckily, most home buyers have been sitting on a mountain of equity that will help them combat losing their 2% percent interest rates on their next home purchase. There hasn’t been a complete flip to a buyers' market, so home sellers are still sitting in a strong position, but in 2025, there isn’t room for bidding wars and ignoring the updates and fixes buyers are looking for.
If you’re selling this year, our free Guide to Selling Your Home has the details you need.
Military Renters: Stability with Room for Savings
Renters, you might have the most consistency of all home shoppers. Rental prices aren’t expected to flux much in 2025. You’ll still compete with a tough crowd for the best rental homes near military bases and likely pay above BAH for premium properties, but if you’re in the market for an apartment, you could snag a good deal thanks to increased multi-family construction. Keep in mind there might be more former renters entering the buying pool thanks to an improved economy and job stabilization.
2025 Housing Market Recap for Military Families
All in all, there won’t be extreme highs and lows for military members to deal with during their housing transactions in 2025. The best way to navigate the unknowns is to work with experienced real estate professionals, even if you choose a For Sale By Owner transaction. Their expertise can save you a lot of frustration and provide a clear path forward.
