The stagnant home market threatens more than just buyers and sellers who hope to make deals next year. In addition, their seamless point is at risk.
Investing real estate, whether you buy a home or investment property, is usually a safe bet: you will earn more money than you spend if you save it long enough. But stubborn mortgage rates, high transaction costs and the reduction of home prices threaten to extend the time needed to reimburse their costs.
“It is important for buyers to determine their expectations given the market environment in which they buy,” says Hannah JonesSenior Analyzer of Economic Research at Realtor.com®.
The General Council recommends that you stay in a house for five years to break. However, if you buy in 2025, you may not recover your costs by 2035.
The 5-year rule, explained
Buying real estate is expensive. Buyers must go out with the money for advance payment, agents fees and closure expenses – just to name a few. But homeowners can usually make this money in just a few years by evaluating the value of the home.
This is where the five -year rule goes into play. This general council recommends that homeowners stay for at least five years before they are sold to ensure that they will reach their inaction point.
But this is really more guidance, says real estate adviser Sarah Strokheinwith Engel and Völkers.
“It always depends on the market. In areas with a constant evaluation, homeowners can see a return earlier. In the more slow markets, it may be necessary for a long time to avoid losses.”
How to care and update your property can also have an impact, she adds. Making improvements to increase value can also shorten the time line.
Capital winds for 2025 buyers
“In today’s market, buyers need to consider whether they are ready to stay a little longer than they needed before they break,” Jones says.
The reasons for this extended stay may be necessary, are triple:
1. Delaying the evaluation
So far, in 2025, the price of the home has been delayed compared to the last five years. Recent sales of existing homes show that housing prices were 3.8% in February 2025 compared to a year before.
Although this is still good news for homeowners (property is gaining value), the pace has significantly slowed down after 2021, when housing prices estimate an average of 17.9%, according to Realtor.com.
This immersion will mean that homeowners will have to wait longer to accumulate enough equity in their house to earn money from sale. But keep in mind that these are only average values.
There are significant regional differences in the rise in price, with housing prices by 10.4% in the northeast, 5.8% in the Midwest, 3.6% to the west and 1.9% south of 2024.
2. High transaction costs
Transaction costs will range from housing to sell homes, but buyers can provide for the cost of between 2% and 5% of the purchase price of the housing of the expenses for closure as fees and taxes of agents.
As these costs are proportional, the high prices of the homes push these costs and make it difficult to make even more difficult home buyers to compensate for the difference in their overhead costs.
3. Sliding the housing prices
The biggest risk of 2025 buyers collide, is a negative capital. In this scenario, buyers may owe more than their home is worth it if they buy a peak market house just before prices fall.
Places like San Francisco, Miami and Austin, Texas, are just a few popular markets to ring in 2025 with remarkable average declines compared to the year before, falling 10.87%, 9.9%and 7.86%respectively.
As the market continues to cool down, other cities may follow their role.
How long will they have to stay in their home 2025 home buyers
Given these challenges, the estimated timeline for buyers seamlessly in 2025 can be as long as 10 years. Let’s look at the numbers:
We can judge, on the basis of February 2025 data, that the home purchased this year will have an average selling price of $ 398,400, a mortgage rate of 6.67%, a tax of 1.7%and 4%transaction costs.
We will assume that this house estimates 3.8% (the average for the country 2025), but it is worth noting that this is a big assumption.
Increasing odds can vary significantly from year to year based on market factors. Do not watch more than the last five years for evidence: Housing prices increased by an average of 9.4% in 2020, 17.9% in 2021, 10.5% in 2022, 1.1% in 2023 and 4.5% in 2024, an average of 8.68% during this period.
Still, assuming that the home bought in 2025. Even if they double their advance payment to 20%, it will take them eight years to reach their hassle -free point.
But for markets like the Northeast and Midwest, which continue to see a significant rating, buyers can break even earlier, says Jones.
What if you have to sell before?
If you need to sell your house in two years or even six months, you can. You just may not return the money you spent buying home.
For many home buyers, this may not matter.
“Buying a home is for both finance and lifestyle. Beyond the assessment, it offers stability, growth of equity and tax relief,” Strochaine saysS
Although the inaction graph is longer than in recent years, it is still a good investment.
“The key is to make a smart, informed purchase with guidance from a reliable local real estate advisor,” she adds.
After all, the five-year rule-and even our updated 10-year rule-really more guidance.