Residential Real Estate in 2025^[1]

A primary residence represents the largest, or one of the largest, assets on a net worth statement for our clients. As such, decisions we make regarding our homes are very important to our financial wellbeing.

Scott Oyler, Head of Existing Home Sales for Cincinnati-based Oyler Hines shared his thoughts with us on the market in 2025: “The Cincinnati real estate market remained resilient so far in 2025, with steady buyer demand despite ongoing pressure from elevated mortgage rates. Home prices continued to experience moderate growth, fueled by a persistent shortage of available homes and strong competition for well-priced properties. While new listings saw a slight uptick compared to the same period last year, inventory remains well below pre-pandemic levels, keeping the market competitive—particularly in sought-after neighborhoods.

Buyers are adjusting to higher borrowing costs, but well-maintained and appropriately priced homes continue to attract multiple offers. Meanwhile, sellers are benefiting from favorable conditions, though pricing strategies remain critical for a successful sale. As we move into the traditionally busy spring market, we expect continued demand to drive activity, with affordability remaining a key factor to watch throughout the year.”

According to a Bankrate[2] article in 2024 referencing the respected trade publication Remodeling, the following are the top 3 in terms of “cost recouped from 2023”:

• Garage door replacement: +91.2%
• Entry door replacement: steel +87.2% (fiberglass was +47%)
• Stone veneer (i.e. replacing vinyl siding): +50.9%

Kitchens, baths, outdoor living, and energy improvements are all still good ideas from several reports.

Smart homes are also becoming the norm, with features like automated lighting, security systems, and energy management tools enhancing convenience and efficiency.

Remote work and hybrid schedules lead homebuyers to seek dedicated home offices or flexible spaces that can accommodate work-from-home setups.

More buyers are focusing on communities that have built or are building green spaces, walkability, access to public transportation, and creating healthier and more connected living environments.

Millennials (age 29-44) are now the largest population in the United States with Gen Z in 3^rd behind boomers.  Gen Z is now in the workforce and as old as 28.   Given home prices and interest rates, there have been negative pressures for younger Americans purchasing their first home.

However, in our experience as advisors, affordability is not just impacting young home buyers but also for people who would otherwise consider downsizing but can’t save money or improve the desire to find a home that is more suitable for aging (i.e. single level living).

Additionally, mortgage rates continue to remain elevated over rates from the past decade yet are below the median 30-year rate[3] of 7.37%.

Mortgage expert, Rob Diederichsen, with Primelending in Cincinnati underscores that “refi activity has seen some action but to impact borrowers holding on to lower interest rates, we will need to hit low 6’s to stir the purchase market.”

We are also seeing more downpayment and home purchasing support from parents. Much of the attitude from parents is accelerating inheritance during a period for their adult children’s lives where the money is more impactful.

Furthermore, a report from Zillow in 2024 indicates that the U.S. is short 4.5 million homes from 2021-2022. With limited tradespeople, general labor issues, land and zoning rules etc., there are pressures that could keep housing supply down.

All this creates unique supply and demand pressures that could remain sticky.

“Inventory is still down [in Cincinnati], creating very competitive multiple offer situations. Getting fully pre-approved prior to entering the home market is highly recommended” Diederichsen said.

[1] Online sources assisted by Microsoft Copilot AI assistant. (2025). Personal communication.

[2]   “The top renovations that increase home value in 2024.” Bankrate. Accessed March 18, 2025

[3] “Historical Mortgage Rates: See Averages and Trends by Decade.” U.S. News & World Report. Accessed March 18, 2025