Warren Buffett's Berkshire Hathaway shares bold housing market insight (2025)

After the Covid housing market boom —fueled by exceptionally low mortgage rates and competitive deals— mortgage rates began to surge. Rates doubled from 3.5% in January to 7% in November 2022, dampening years of strong housing activity.

Housing sentiment has declined for the past several years and has yet to return to previous levels.

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Homebuyers have had difficulty navigating this challenging housing market as the cost of living rises and young buyers are priced out of homeownership. While a lack of inventory has contributed to market gridlock, the tide may change as more sellers begin to list their homes this year.

However, first-time homebuyers still struggle to keep up with rising home prices.

Berkshire Hathway Home Services shares guidance on how buyers and sellers can navigate a stagnant housing market with rising prices, sluggish demand, and limited inventory.

Berkshire Hathway Home Services notes that housing prices are crucial in a challenging market

Althoughelevated mortgage rates, rising prices, and a lack of inventory have plagued the housing market since 2022, there may be a light at the end of the tunnel. Mortgage rates have been consistently falling since January, and Fannie Mae predicts thatrates will continue to drop to 6.3% by the end of the year.

Experts predict that lower mortgage rates will prompt more sellers to list their homes and incentivize buyers to enter the housing market. However, the rising cost of housing may still make first-time homebuyers hesitant, keeping demand low.

More on homebuying:

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• Housing expert reveals surprising ways to reduce your mortgage rate
• Dave Ramsey warns Americans on a homebuying mistake to avoid
• Warren Buffett's Berkshire Hathaway sounds the alarm on the 2025 housing market

To generate buyer interest, theBerkshire Hathaway Home Services blog recommends that sellers price their homes competitively from the start, instead of having to reduce the listing at a later date.

The blog explains, "Price trends are trackable, so if your market is slowing, you should price your home slightly below the market trend. You want to avoid having to reduce your list price, as the longer your home is on the market, the more likely it is that other agents and their buyers may conclude your home has a problem."

Berkshire Hathway Home Services highlights that renovations can generate the best housing ROI

Although buying "fixer-upper" homes to renovate and flip is a growing investment trend, many buyers who are looking for a home to live in permanently appreciate a house that has already been remodeled.

According to a recent Zillow survey, online listings forrenovated homes are shared 30% more than fixer-uppers.

Berkshire Hathaway Home Services underscores the value to sellers in upgrading a house before listing it on the market.

"The better condition your home is in, regardless of age, the more money you can ask. While it seems counterintuitive to spend money to make money, such as paying for remodeling or other professional services, your job is to make your home competitive to other similar homes with upgrades that buyers prefer."

As more sellers begin to list their homes and buyers have more options and negotiating power, ensuring that sellers' homes are in good condition will allow them to compete with other property listings