In 2025, the U.S. housing market is navigating a complex landscape shaped by shifting demographics, economic uncertainty, and evolving trade policies. Baby boomers have emerged as the dominant force in real estate transactions, while tariffs and stock market volatility are influencing buyer behavior and home prices. Understanding these trends is crucial for both buyers and sellers aiming to make informed decisions in today’s market.
Baby Boomers Lead the Housing Market
According to the National Association of REALTORS®’ 2025 Home Buyers and Sellers Generational Trends Report, baby boomers (ages 60–78) now represent 42% of homebuyers and 53% of sellers, surpassing millennials, who have declined to 29% of buyers . This shift is largely attributed to boomers’ substantial home equity, accumulated over years of homeownership, enabling many to purchase new homes outright with cash. In fact, nearly half of older boomers and 40% of younger boomers are buying homes without financing . (Flexing Their Equity, Baby Boomers Are Driving the Housing Market, Baby Boomers Regain Top Spot as Largest Share of Home Buyers)
Boomers are primarily motivated by desires to downsize, relocate closer to family, or transition into retirement-friendly communities . Their financial flexibility allows them to navigate the current market more effectively than younger buyers, who often face challenges related to affordability and financing.
Tariffs and Economic Uncertainty Impact Housing
The reintroduction of aggressive tariffs in 2025 has added layers of complexity to the housing market. President Trump’s administration imposed a 145% tariff on Chinese imports, leading to increased costs for building materials such as lumber, steel, and aluminum . These tariffs have raised the average cost of constructing a new home by approximately $9,200 . (100 days in, these are the 3 ways the Trump trade fell apart, Trump’s tariffs loom over the economy as shipments from China fall, Housing Market Gets Warning Despite ‘Win’ on Trump Tariffs)
The broader economic implications are significant. The U.S. economy contracted by 0.3% in the first quarter of 2025, marking the first decline in three years . Consumer confidence has also dipped, with many Americans expressing anxiety over rising prices and potential recession . This economic backdrop is causing both buyers and sellers to proceed with caution, affecting housing demand and pricing strategies. (Trump’s tariffs loom over the economy as shipments from China fall, Consumers feel like they’re on ‘a very scary roller coaster.’ That’s bad news for Trump’s economy.)
Opportunities for Buyers and Sellers
Despite these challenges, opportunities exist for both buyers and sellers:
For Buyers:
- Negotiation Leverage: With homes staying on the market longer—averaging 36 days—and sellers more willing to reduce prices, buyers have increased negotiating power . (‘Discouraging’: Frustrated sellers are cutting house prices by tens of thousands of dollars as buyers grow more selective)
- Incentives: Some sellers are offering incentives, such as covering closing costs or providing home warranties, to attract buyers in a more competitive market.
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For Sellers:
- Targeting Boomers: Given the dominance of baby boomers in the market, sellers might consider tailoring their homes to appeal to this demographic, emphasizing features like single-story layouts or proximity to healthcare facilities.
- Pricing Strategies: Accurate pricing is crucial. Overpriced homes may linger on the market, while competitively priced properties can attract serious buyers more quickly.
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Navigating the Market with County Properties
In these uncertain times, partnering with experienced real estate professionals is more important than ever. County Properties offers expert guidance to help you understand market trends, assess property values, and make informed decisions. Whether you’re a buyer seeking the right home or a seller aiming to maximize your property’s value, our team is here to support your real estate journey.
Lets chat about it!Note: This blog post is for informational purposes only and does not constitute financial or legal advice. For personalized guidance, please consult with a qualified professional.