Buying a Home in 2025: What You Need to Know Before You Sign.

As we move through 2025, the real estate market remains complex and evolving. At Spizzirri Law, we understand that purchasing a home is not only a major financial decision—it’s also a tax-sensitive one. With interest rates, market dynamics, and affordability all in flux, here’s what buyers need to know this year, along with the financial and legal implications that come with each factor.

Pros of Buying a Home in 2025

Stabilizing Mortgage Rates

While mortgage rates remain elevated compared to the historically low levels seen during the pandemic, they’re expected to ease slightly—dropping from 6.7% to 6.4% by 2026. This gives buyers a chance to lock in rates before they potentially rise again.

New-Home Market Is Strong

Builders are steadily adding inventory, and the supply of new homes is more plentiful than that of existing ones. Many builders are offering incentives like mortgage rate buydowns, which can be structured to offer tax advantages if handled properly.

Improving Inventory of Existing Homes

More existing homes are expected to come on the market later in the year as homeowners who’ve been holding out may finally list. This gives buyers more choices and room to negotiate on both price and contract terms.

Flexible Lending & Potential Tax Deductions

Some lenders are offering more accessible financing terms, including lower down payments. Depending on your financial situation, mortgage interest, points paid, and property taxes could be tax-deductible—making professional tax advice a critical part of the process.

Cons of Buying a Home in 2025

Affordability Remains a Major Barrier

Home prices remain high, and despite some relief in rates, affordability is still a top concern—especially for first-time buyers. With fewer options in affordable price ranges, tax strategy becomes even more important to manage overall cost.

Low Inventory of Existing Homes

Many current homeowners are holding tight to their low-rate mortgages, making inventory scarce and keeping prices elevated. Buyers may need to consider new builds or properties in emerging areas—which can have different tax implications depending on location and property use.

Rising Rent and Delayed Buying

Many younger buyers are opting to rent longer while they wait for better conditions. However, rising rent costs may offset potential savings—something to weigh against the long-term tax benefits of homeownership.

New Buyer Contracts and Legal Fees

Following a recent legal settlement, real estate agents may now require buyers to sign compensation agreements up front. These contracts can have financial consequences—especially regarding how fees are structured and whether they’re tax-deductible under certain business or investment arrangements.

How We Can Help: Tax Guidance for Homebuyers

At Spizzirri Law, we specialize in helping clients make smart financial decisions around major life events—including buying a home. Here’s how we can assist:

• Tax Optimization: We help you understand which parts of your home purchase may be tax-deductible, including mortgage interest, points, and property taxes.

• Ownership Structures: For investors or buyers purchasing a second home, we advise on whether to hold the property personally, through a trust, or via an LLC for optimal tax treatment.

• Capital Gains Planning: If you're upgrading from a previous home, we’ll help you structure the sale to take full advantage of the capital gains exclusion on primary residences.

• Audit Protection: We ensure that your deductions and tax filings are fully compliant, minimizing risk and ensuring peace of mind come tax season.

• Strategic Timing: We work with your real estate team to time the purchase in a way that aligns with your broader tax goals for the year.

Reference: The Kiplinger Letter: Forecasts for Executives and Investors-Vol. 102, No.10