- Mortgage applications for purchases in 2025 have bounced back, with positive growth seen in four of the first ten weeks.
- Mortgage rates are still high at 6.64%, but they are moving down from the high points of 2023, which were near 7.50%.
- The number of homes for sale that are active on the market increased to 668,155 in March 2025, which is up from 507,160 the year before.
- Price reductions are happening more often, which gives buyers more power in negotiations.
- Home prices across the nation are predicted to go up by just 1.77% in 2025, indicating a period of slow price increases.
Will Lower Mortgage Rates Cause Home Sales to Jump Up in 2025?
People buying, selling, and investing are watching the housing market in 2025 with fresh interest. Even though mortgage rates have not yet fallen below the important 6% level, they are moving in a lower direction, leading to talk about a possible comeback in home sales. With inflation becoming less intense, Treasury yields getting better, and a sense of careful optimism, the market seems to be on the verge of a change—especially in active markets such as Las Vegas. Let’s look closely at the trends, data, and expert opinions that are shaping what could be a very important year for housing in the U.S.
Current Mortgage Rate Trends and What Happened Before
The mortgage market in the U.S. in 2025 is still balancing between being affordable and being restrictive. After going above 7.50% in 2023, rates have become more stable, expected to stay between 5.75% and 7.25%, with the average rate around 6.64% in early 2025. Even though we are not yet below the 6% mark that people pay close attention to, the present situation is much more favorable for buyers than it was just a year ago.
Why 6% Is Important
Looking back, 6% is more than just a number. It acts as something that triggers confidence for those buying for the first time and people who have been waiting to decide. In previous periods, going below this point has resulted in a noticeable rise in new applications, requests for information, and completed sales. Reduced mortgage rates make things more affordable, increase how much people can borrow, and often persuade renters to decide to buy a home.
The Federal Reserve is gradually making monetary policy less tight, and inflation is slowing down, which suggests that rates may go down further later in 2025. If that occurs, we might see homebuyers who are sensitive to rate changes become active again in large numbers, particularly in metro areas where price is a key factor.
How Lower Rates Affect Real Estate in Las Vegas
For a market like Las Vegas that has high demand and a lot of activity, mortgage rates have a particularly strong effect. This city is a good example of where affordability, investor activity, and people moving in and out meet. Local real estate professionals, like Steve Hawks, point out that even small changes in mortgage rates can have significant effects on the number of buyers in the local market.
A Turning Point in Southern Nevada?
Hawks says, “Every time we see rates get close to that 6% point, the number of buyers looking increases quickly.” We are beginning to see this pattern happen in early 2025. Although rates are still above that point but moving lower, buyers are starting to show interest—but are carefully waiting to see if rates improve more.
In Las Vegas, lower mortgage rates not only make homes more affordable; they also widen the group of potential buyers to include more investors, people working remotely from cities with higher costs, and those buying their first homes who could not qualify before.
As rates get closer to 6%, competition for homes for sale—especially in suburban areas and close to new housing developments—could become very intense. Because of this, timing is very important for both buyers and sellers.
Purchase Application Data Shows Slight but Positive Growth
One of the first signs of changes in buyer behavior in real estate is how many mortgage applications are being made to buy homes. These show current interest in getting loans to purchase homes and act as a forward-looking measure of activity.
2025 Compared to 2024: A Clearer Picture
In the first 10 weeks of 2025, the market saw
- 4 weeks of growth in applications
- 3 weeks where applications stayed the same
- 3 weeks where applications went down
If we compare this to the start of 2024—when applications went down for 14 weeks in a row—it is clear that the market is more stable this year.
While we are not seeing very fast growth, the direction suggests a slow increase in confidence. More importantly, it indicates that buyers are feeling better as mortgage rates slowly decrease.
For Las Vegas, which attracts different types of buyers from across the U.S., changes in national application trends often affect local markets a few weeks or months later. Buyers who are paying attention now might be getting in before things really pick up.
Weekly Pending Sales Indicate Things Are Becoming Stable
Pending home sales—homes that are under contract but not yet sold—give a more current picture of buyer activity than sales that have already closed. They provide a quick check on demand and help predict how quickly homes are selling.
Comparing the Numbers
- 2025: 346,533 pending contracts
- 2024: 356,618
- 2023: 327,933
While 2025 is a little behind last year, it is doing better than the very low numbers of 2023. This sideways movement suggests stability instead of a shrinking market, and many experts think that another small decrease in mortgage rates could push things into positive territory.
In Las Vegas, pending sales are still strong in areas where there are newer housing developments, incentives for investors, and suburban features. The valley’s affordability, especially in neighborhoods that are well-connected, makes it well-positioned as rates ease.
Yield Curve and Watching the Fed: The 10-Year Yield as a Rate Indicator
One of the most dependable ways to predict mortgage interest rates is the 10-year Treasury yield. Because mortgage rates move closely with these yields, it is important to watch the bond market to predict where borrowing costs might go next.
Where Yields Are Now
- Predicted 10-Year Yield Range: 3.80% – 4.70%
- Current Yield: Around 4.25%, sometimes testing support around 4.15%
If yields drop below 4.15% and stay there, mortgage rates would likely follow and go down as well. For homebuyers, especially in cities like Las Vegas where rates matter a lot, this could mean a real change in affordability—allowing them to get loans for more expensive homes without increasing their monthly payments.
Things that could create risk include unexpected inflation, global economic shocks, and U.S. jobs data—all of these affect bond prices and what the Fed might do.
Mortgage Spreads and How Much Lower Rates Could Go
In addition to Treasury yields, the mortgage spread—which is basically the extra charge over 10-year bonds that lenders add for profit and to protect against risks—determines what the final mortgage rates are.
Why Spread Behavior Is Important
- Normal Spread Range: 1.60% – 1.80%
- Recent Average Spread: 2.54%
- Possible Rate Decrease if Spread Returns to Normal: 0.79% – 0.89%
This large spread means that there is room for rates to fall further even if yields do not change. This is important because it makes it more likely that we will reach that desired sub-6% mortgage rate range by the end of 2025.
If spreads become smaller and yields also decrease, homebuyers in Las Vegas and other places could see mortgage offers in the high 5% range—which could really change the number of homes being sold.
Housing Inventory: Slowly Moving Toward Balance
It is just as important to watch the supply of homes as it is to track rates. When there are more homes for sale, buyers have more choices, and sellers are encouraged to set prices more reasonably.
Inventory Trends in Numbers
- March 2025 Active Listings: 668,155
- March 2024 Active Listings: 507,160
- March 2015 (for comparison): 985,411
Although we are slowly moving back toward a balanced market, the number of homes for sale is still much lower than before the pandemic. Important metro areas like Las Vegas are still tight, especially in the mid-price ranges, which is a concern for buyers even though the situation is getting better.
Newly built homes are making up a larger part of the homes available for sale in Las Vegas, which helps to reduce some of the supply problems but also creates more competition for existing resale homes.
New Listings: Slowly Increasing, but Not Booming
Data on new listings shows how confident sellers are—often the last group to come back into the market after things have slowed down. In 2025, new listings are increasing, but slowly.
National Weekly New Listings
- 2025: 69,701
- 2024: 60,328
- 2023: 49,993
While this increase is a good sign, it is still small. In past housing booms, weekly new listings often went above 250,000—a level we are not close to now.
Las Vegas is continuing to follow the national trend, with more homes being put on the market, especially in areas where values have become stable or increased slightly. This helps to create more balanced conditions, but buyers still need to be competitive to get homes they want.
Price Cut Percentages Suggest Buyers Are Gaining Power
As sellers compete more and rates remain high compared to the past, more homeowners are lowering their asking prices to attract buyers who are qualified.
What Price Cuts Indicate
Usually, about one-third of homes listed have their prices lowered. In 2025, that number is going up, which shows that buyers are getting more power in negotiations. Las Vegas, where many listings are for investors or vacation homes, has seen even higher rates of price reductions, particularly for homes priced above the median value.
For buyers, 2025 might be the best time in years to negotiate—whether that means getting concessions, buying for less than asking price, or securing good terms on a newly built home.
Home Price Growth Prediction: Small but Positive
The housing market is no longer seeing rapid price increases. Instead, we are entering a time of slow growth with high asking prices leveling off.
Predicted Growth
- National Average Predicted Growth: 1.77%
- Real Price Growth (after inflation): Likely flat or negative
Home prices in Las Vegas are expected to follow this pattern, with price increases mainly limited to homes in good locations that are move-in ready and new constructions. Real estate professionals are advising sellers not to expect the same price increases as in past years and to instead focus on setting realistic prices and being competitive.
Watching the Fed and the Larger Economy
Mortgage rate trends will continue to be strongly connected to what the Federal Reserve does and the overall economic situation throughout 2025. This week’s economic announcements include
- New home sales
- Pending home sales
- Speeches by Fed members
- Jobless claims
Increasing jobless claims might indicate that the job market is cooling down, which could cause the Fed to take a less aggressive approach to rates. Also, international instability, changes in tariff policies, and inflation continue to be unpredictable factors that can affect Treasury yields and, as a result, mortgage rates.
What All of This Means for Homebuyers in 2025
2025 could be a great time for buyers who have been waiting for a better deal. As mortgage rates move slightly lower and the number of homes for sale slowly increases, the basic factors of supply and demand are starting to become less intense.
Opportunities for Buyers
- More potential to negotiate
- Better loan terms than in 2023
- More homes being listed for sale
- Time to take action before rates below 6% cause bidding wars
Las Vegas is still full of opportunities, but this favorable period might not last. Buyers should be active in the next few months, before a possible rate decrease makes competition stronger.
Strategic Advice for Las Vegas Buyers & Investors
Steve Hawks suggests using national trends along with very specific local actions. Las Vegas is made up of many small markets with different types of buyers and price ranges.
Tips for Buyers
- Concentrate on areas that are not as expensive as they should be, like Spring Valley and parts of North Las Vegas.
- Look for sellers who are motivated and have listings that have expired.
- Think about builder incentives, such as reduced rates or help with closing costs.
Tips for Investors
- Examine rent-to-value ratios in zip codes in the central urban areas.
- Check out areas with strong demand for short-term rentals.
- Get ready for opportunities to refinance if you buy now at higher rates.
Is the Market Changing Direction or Just Becoming Stable?
The real estate market in 2025 is definitely showing signs of becoming stable, with a good chance for growth if rates continue to decrease below 6%. While it might not be a complete boom, conditions are coming together for a measured increase in home sales.
For buyers, acting early could mean better terms and less competition. For sellers, the task is clear—price homes strategically and stay aware of market changes to get the best possible value.
Contact Steve Hawks to get clear information—and opportunities—related to your real estate goals.