2025 real estate year end recap
is more than a list of headlines. It is a map of how buyers, sellers, and homeowners adapted when rates, inventory, and policy all shifted at once. Below I break down the key trends, why they mattered, and practical advice for anyone making a move in 2026.
Table of Contents
Quick overview: the themes that defined 2025
- Economy ran hotter than expected
— third quarter GDP surprised on the upside, which kept inflation concerns alive and made rate cuts less likely.
- Rates cooled but stayed consequential
— mortgage rates moved with the 10-year Treasury and the spread narrowed, easing pain for some buyers while keeping affordability tight for many.
- Affordability became mainstream
— median first-time buyer age rose, first-timers made up a smaller slice of buyers, and rising property taxes and insurance squeezed budgets.
- Inventory rose without a crash
— more homes on the market meant more choices, but prices mostly flattened rather than collapsing.
- Policy and process shifts
— new laws around buyer-broker agreements changed how agents and buyers work together.
1. Economic backdrop: growth, inflation, and interest rates
GDP coming in stronger than analysts expected pushed a central forcing function for the year: higher growth suggests demand is still healthy, which briefly raised inflation concerns. When the economy is strengthening, the chance of a near-term Fed rate cut shrinks. For buyers that meant borrowing costs were unlikely to fall fast enough to change decisions made this year.
Mortgage interest rates do not respond directly to the Fed funds rate. They track longer-term yields — most importantly the 10-year Treasury. In 2025 the 10-year yield hovered in a range that made a typical 30-year fixed mortgage rate attractive compared with the elevated levels of 2023. The technical piece to understand is the spread
between the 10-year and mortgage rates. When volatility drops, that spread tightens, and mortgage rates can fall even if short-term policy rates stay higher.
What this meant for buyers
- If you were priced out in 2024, modestly lower mortgage rates in 2025 helped some buyers return, but only where incomes and downpayment savings matched local prices.
- Borrowers who can pivot to adjustable or shorter-term products might find a better fit, but those come with tradeoffs and more rate risk.
2. Politics, policy, and the one big bill
One major policy win was the passage of the tax law popularly called the one big beautiful bill. Keeping tax parameters from expiring effectively avoided an immediate tax hike for many households. The knock-on effect: many taxpayers were set up for larger refunds in the next tax season, injecting short-term purchasing power into the economy.
On the flip side, tariff discussions and new trade measures pushed material costs upward for builders and manufacturers. Tariffs are inflationary in the short run because they are a tax on imports; builders passed those costs along, sometimes immediately. If a builder raises list prices the day a tariff goes into effect, that increase shows up in the market quickly.
3. Affordability moved from whisper to headline
Affordability has long been a concern, but in 2025 it reached mainstream coverage. A few key datapoints made this clear:
- The median age of a first-time buyer hit 40 — the highest on record. That signals younger households are delaying purchase until later in life.
- First-time buyers comprised only about 21 percent of the market. Many of those sidelined are priced out, need two incomes, or rely on help from family.
- Homeowners insurance and property tax increases began to chip away at monthly affordability, especially in regions exposed to extreme weather and rising claim rates.
Delaying marriage, staying in extended family households, and making different life choices all feed into the rising median age for first-time buyers. When the median first-time buyer income sits near six figures — for example around $94,000 in some metros — a single-earner household is often priced out. That is a structural affordability constraint.
Practical takeaways on affordability
- Run the monthly numbers, not just the purchase price. Include tax and insurance increases when you budget for a home.
- Consider whether a smaller footprint, different neighborhood, or new-construction incentives can bridge the affordability gap.
- If parents can help, intergenerational purchases were a material part of the market — the "bank of mom and dad" moved more buyers into homes in 2025.
4. Mortgages explained: the 10-year treasury, spreads, and why rates moved
It helps to think of mortgage rates as layered: base risk free yield (10-year Treasury), plus a spread that compensates for risk and market volatility. In 2023 that spread ballooned up to near 2.75 percent in times of volatility. By 2025, as volatility calmed, spreads moved closer to historical norms, which lowered mortgage rates even though short-term policy stayed higher.
This nuance explains why campaigns to "force" mortgage rates lower by political pressure on the Fed miss the mechanics. The Fed controls short-term borrowing; longer-term yields and investor appetite determine mortgage rates.
5. Inventory and sales: a market that normalized without crashing
Across many metros — and locally — inventories rose toward pre-pandemic levels. In Douglas and Sarpy County inventory climbed about 14 percent year-to-date in 2025. That translated into more choices for buyers, longer days on market, and less hyper-competitive bidding.
At the same time, median prices largely flattened rather than collapsing. Omaha saw median closed prices up only about 1.5 percent year-to-date. Sales increased modestly. This pattern — inventory up, prices flat, sensible sale volumes — is what a return to a normal market looks like.
Why prices did not implode
- Life events still create movement: relocations, marriages, divorces, and deaths mean real estate continues to trade.
- New construction supplied a steady floor of homes, preventing supply shortages in many neighborhoods.
- Cash buyers remained significant. In many markets cash purchases represented over a quarter of transactions — cash buyers are unaffected by mortgage rate shifts.
6. New construction vs existing homes
New construction was an important theme, but it remained a portion of the market. In 2025 new builds rose modestly year-over-year, but the bulk of transactions remained existing homes. Local data showed new construction up around 1.4 percent while existing home sales rose near 4.9 percent year-over-year.
Builders adjust product mix when rates or affordability change. That means smaller floor plans, alternative pricing, or different incentives to reach buyers. Large national builders can pre-sell many homes and manage inventory more predictably; local builders often tailor their product to the market.
7. The buyer-broker agreement became law — and that matters
One of 2025’s major structural changes was the formalization of buyer-broker agreements in some states. Where implemented, the rule required a written agreement before an agent could show homes. The agreement specifies duration and compensation and uncouples the traditional MLS commission posting practice.
Practical consequences:
- Buyers should read the agreement before touring. It is legally binding and defines the relationship.
- Agents can offer short-term or single-showing agreements for out-of-town buyers or those who want a test-drive of service.
- Always confirm which jurisdiction the agreement covers. If you sign with a Nebraska agent and look at properties in Iowa, separate agreements may apply.
For agents, the new framework forces transparency. For buyers it can mean clearer expectations — but also potential surprises if you don’t understand the duration or compensation clause.
8. Local outlook: why Omaha stayed steady
Local markets vary. Omaha benefited from steady job growth, ongoing construction projects including an airport upgrade and new vertical developments, and a metro population that crossed the one-million mark. Those fundamentals helped keep the market stable even as national headlines debated crashes and booms.
Roads, cranes, and population growth are visible signals of demand. That said, local cost factors — property tax, hail and wind claim exposure, and insurance premiums — make Omaha-specific affordability contours distinct from coastal markets.
9. What actually mattered for buyers, sellers, and homeowners
When you step back from the noise, these are the concrete rules that shaped outcomes:
- Affordability is monthly math
— taxes, insurance, and mortgage payments together determine whether a purchase fits your budget.
- Inventory gives buyers choices
— more inventory means more negotiating power and room to inspect instead of waived contingencies.
- New construction competes with existing homes
— sellers of older homes need to make repairs and stage to compete.
- Legal clarity matters
— buyer-broker agreements and disclosure rules change how agents are compensated and how buyers should behave.
- Long-term perspective wins
— real estate builds wealth slowly. Timing the market rarely outperforms steady ownership and sensible leverage.
Actionable checklist before you buy or sell in 2026
- Buyers: Run a three-scenario budget (best, expected, worst) that includes tax and insurance increases.
- Sellers: Budget for small repairs and staging to compete with new construction listings.
- Both: Read and ask about any buyer-broker agreement before touring homes. Ask about duration and compensation.
- Investors: Expect steady, not explosive, appreciation. Cash flow and cap rate matter more than short-term flips.
FAQ
How did mortgage rates move during 2025 and why did they fall even if the Fed didn’t cut?
Mortgage rates are tied to long-term yields, especially the 10-year Treasury, plus a spread that reflects risk and volatility. In 2025 volatility fell and the spread tightened, which lowered mortgage rates even though short-term policy rates remained higher.
Why didn’t higher inventory cause prices to crash?
Inventory rose toward normal levels, but demand and life-event transactions — relocations, marriages, divorces — continued to sustain the market. Additionally, cash buyers and new construction supported price floors so median prices flattened rather than collapsing.
What does the buyer-broker agreement mean for me as a buyer?
The agreement formalizes the agent-client relationship, specifying duration and compensation. Read it before touring homes. You can ask for a short-term or single-property agreement if you are new to an area or only shopping briefly.
Is it better to wait for lower rates?
Waiting for rates assumes they will fall significantly and soon. Historically rates can remain higher for many years. If you can afford a home comfortably with a buffer for job loss or repairs, buying now can make sense because real estate typically rewards a long-term hold strategy.
How important is new construction in the market?
New construction matters as a competitive choice for buyers, but it is only a portion of total sales. Builders adapt product mix and pricing to match affordability, which influences the entire market’s supply dynamics.
What should sellers do to compete in 2026?
Focus on presentation. Complete small repairs, stage the home, and price competitively. Buyers have more options than during the pandemic era, so visibility and condition drive offers.
How did insurance and property taxes affect deals in 2025?
Rising homeowner premiums — driven by increased claims from severe weather and large regional events — raised monthly ownership costs. Higher property taxes had the same effect. These factors pushed some buyers to delay or choose different price points.
Final thoughts
The 2025 real estate year end recap
shows a market that adjusted rather than imploded. Growth, policy shifts, and risk repricing nudged everyone to be more deliberate. Buyers gained options as inventory rose; sellers had to sharpen their presentation; agents and clients learned to work under new legal agreements.
If you are planning a move in 2026, focus on the monthly math, understand local taxes and insurance trends, and treat market timing as secondary to affordability and life plans. The best decisions come from clear budgets, realistic expectations, and a long-term view.
2025 real estate year end recap
should be a reminder: markets change, fundamentals matter, and preparation wins more often than prediction.
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