According to Bank of America’s latest Homebuyer Insights Report, prospective homebuyers remain hesitant to enter the housing market, but many are optimistic that conditions will improve within the next year. The report, released on July 19, 2025, suggests that while mortgage rates and home prices remain a concern, buyers’ expectations for more favorable conditions are leading to increased anticipation of market changes.
Buyer Sentiment: Waiting for Better Conditions
While higher mortgage rates have made it more challenging for many buyers, 75% of respondents in Bank of America’s survey expect mortgage rates and home prices to improve in the next 6-12 months. This is causing many potential homebuyers to delay their purchases, holding out for more favorable conditions.
Despite these delays, the sentiment among buyers has improved compared to the previous year. 51% of prospective buyers feel that the housing market is in a better position now than it was 12 months ago, indicating that many buyers are hopeful about the future of the market.
The main reason behind the delay in purchasing is the expectation of better rates and lower prices. In particular, many buyers are waiting for interest rates to fall, as the cost of borrowing has remained relatively high for most of 2025.
Expectations for the Future: A Change in Conditions
The Bank of America report predicts that mortgage rates will likely decrease as the economy stabilizes and inflationary pressures ease. If rates fall below 6%, experts believe that the market could experience a surge in demand, especially from buyers who have been holding out for better borrowing conditions.
Additionally, with inventory levels rising across many metro areas, homebuyers will have more choices in the months to come. As more properties become available, competition will likely ease, and home prices may begin to stabilize or even decline in some regions. This shift will benefit buyers, especially first-time homebuyers who have been unable to compete in the previous seller-dominated market.
Implications for Realtors
For realtors, these trends present both challenges and opportunities. In the short term, real estate professionals will need to be prepared for more cautious buyers who are waiting for the market to improve before making a move. Realtors can assist these buyers by keeping them informed about potential rate cuts and price adjustments while guiding them through the waiting process.
As conditions improve, realtors will likely experience a surge in demand, particularly as buyers re-enter the market. Sellers, too, may benefit from increased competition in the coming months, as buyers return with renewed interest.
For sellers, this may be the time to adjust their expectations to be more in line with the market’s anticipated changes. Pricing strategies that worked in a hot market may need to be revised, as buyers will likely be more price-sensitive and selective in the coming year.
Looking Ahead: Potential Market Surge in 2026
As buyers anticipate improved conditions in 2026, the real estate market could experience a strong recovery in terms of both demand and sales volumes. Mortgage rate reductions and price stability are expected to trigger a wave of activity, especially in suburban and growth markets. Realtors who are prepared to meet the demands of this influx of buyers will be best positioned for success.
