To put the current state of the U.S. housing market in context, it’s essential to consider a sequence of major economic developments from recent years.
In 2022, inflation surged dramatically, prompting the Federal Reserve to raise the federal funds rate in an effort to curb consumer spending by making loans and credit more costly.
This assertive monetary strategy aimed to bring inflation down from its peak of 9% toward the Fed’s target of 2%. By late 2024, inflation had gradually eased, leading the Fed to shift gears and begin cutting interest rates.
However, contrary to predictions that mortgage rates would dip below 6% following these adjustments, they unexpectedly climbed back toward the 7% mark.
Ongoing economic uncertainty, volatile market behavior, and lingering inflationary forces have pushed mortgage rates higher, slowing down the housing sector and dampening enthusiasm among both buyers and sellers.
On Sept. 17, the Fed enacted a 0.25% rate cut, lowering the federal funds rate to a range of 4.0% to 4.25%, compared to the previous range of 4.25% to 4.5%.
This marked the first rate reduction since December 2024, driven by mounting worries over softening job data and persistent inflation. Fed officials have indicated that further rate cuts could be considered later in 2025.
And that would coincide with the holiday season.
Berkshire Hathaway says homebuyers should consider the holidays
Warren Buffett’s Berkshire Hathaway HomeServices believes the November and December holiday season is a good time to explore buying a home.
Beyond the possibility that mortgage rates may be coming down — sparked by the possibility of more Fed interest rate cuts on the horizon — other reasons to look at buying a home during the last months of the year present themselves.
“If you want to celebrate the holidays by pausing your home search until next year, you may be missing an excellent time to buy a home,” the company wrote on its blog.
Related: Fannie Mae predicts major mortgage rate change coming soon
Berkshire Hathaway explains a few reasons why this period of time should not be overlooked by potential homebuyers.
“Homes on the market during the holidays have typically been for sale for a while,” the company wrote. “They could be overpriced or in less than move-in condition. The owners could be recent heirs, landlords, work transferees, divorcees, widowers, etc. ”
“What these homes have in common are highly motivated sellers.”
Berkshire Hathaway explains money-saving opportunities for homebuyers
Warren Buffett’s home services company explains the convenience and financial advantages homebuyers can enjoy during the holidays.
“As other homebuyers sideline themselves, you’ll also have an easier time shopping for homes and service providers like home inspectors, mortgage lenders, contractors, movers, and others,” the firm wrote.
“And you can save money — homes typically sell for more in the spring and summer than in the winter,” Berkshire Hathaway continued.
More on homebuying:
- Zillow warns Americans on housing market, mortgage worry
- Berkshire Hathaway HomeServices explains housing market changes
- Fannie Mae forecasts mortgage rate shakeup
The company also discussed the tax implications of making a purchase before the end of the year.
“Lastly, closing your home purchase before Jan. 1 gives you an extra year of tax deductions and benefits,” Berkshire Hathaway wrote. “If you close after that date, you must wait until the following year to claim benefits.”
“Different seasons offer different advantages, but the holidays can be uniquely beneficial.”
Berkshire Hathaway HomeServices explains holiday homebuying
- Putting your home search on hold until after the holidays might mean missing out on a prime buying opportunity.
- Properties listed during the holiday season often remain unsold for some time, possibly due to high asking prices or needing repairs.
- Sellers during this period may include individuals dealing with inheritance, job relocations, divorce, or loss — many of whom are eager to finalize a sale.
- With fewer buyers actively looking, you’ll face less competition and find it easier to schedule appointments with professionals like inspectors, lenders, and movers.
- Winter tends to offer lower home prices compared to the peak buying seasons of spring and summer, potentially saving you money.
- Finalizing a home purchase before the end of the calendar year allows you to take advantage of tax benefits sooner, rather than waiting another year.
- While each season has its own perks, the holiday period can present distinct advantages for motivated buyers.
Related: Warren Buffett’s Berkshire Hathaway reveals housing market changes, trends
