With a new year around the corner, the real estate industry is preparing for an influx of new homes entering the market, or rather reentering the market, perhaps a bit sooner than expected.
According to a study conducted by Bright MLS, the homeowners most likely to sell in 2025 are those who purchased their home during the pandemic.
The survey of 1,581 homeowners revealed that 32.2% of homeowners planning to sell in 2025 have lived in their homes for less than five years. This contrasts the 12-year average of homeowner tenure, according to a recent Redfin study.
This group of pandemic-era sellers are mostly in their 30s and 40s, and they’re primarily selling to keep up with family and career changes.
RISMedia spoke with the report’s author, Bright MLS Chief Economist Dr. Lisa Sturtevant, for greater insights into why homeowners who purchased their homes during the pandemic are looking to sell, and what further impacts this may have on the industry.
A widening wealth gap
Not only did low rates enable younger homebuyers to sell earlier than previous generations by building quick equity, but it revealed a new pattern that may be shown more drastically in the coming years—a widening of the wealth gap in young adults, most apparent among those in their 30s and 40s, predicts Sturtevant.
“We hear a lot about the wealth gap in America. A lot of that wealth gap is explained by different rates in homeownership. People who are homeowners have higher levels of wealth than renters,” Sturtevant says. “If you think about that for people in their 30s, the pandemic really gave a shock to the system; people who were fortunate enough to jump on very low mortgage rates and get into homeownership are now able to sell and reup to a bigger asset—their wealth is increasing while those who were not able to get into the housing market are falling further behind.”
Looking ahead, it does not seem like this bridge will be gapped soon.
“It’s still going to be challenging next year for first-time homebuyers to get in,” says Sturtevant. “It’s not going to get any easier, and it’s only going to make it so that the folks who are advantaged already are going to be more advantaged in the year ahead, while those who have been left behind are going to continue to have a harder time.”
The average age of first-time homebuyers has now reached an all time high, at 38 years old, according to a study from the National Association of REALTORS® (NAR).
The same lock-in effect causing this wealth gap in younger generations also works to further divide more affluent borrowers from those in less affluent households, according to a group of researchers at the Federal Housing Finance Agency.
While affluent borrowers are the most locked-in, the results also indicate that they are more financially equipped to time the sale of their home to take advantage of interest rate movements. In contrast, less affluent households face conditions that force them to sell at inopportune times, researchers wrote in a recent paper.
Pandemic-era homebuyers are moving on up
Record low mortgage rates during the pandemic allowed many people to lock-in a good rate and quickly accrue equity in their homes, much quicker than usual.
“People have always been able to leverage a relatively small down payment to build equity in their home,” Sturtevant says. “The difference this time is that equity got accrued so much faster than it normally does because of the run-up in home prices.”
First-time homebuyers who were fortunate enough to get into the market during the pandemic are now turning into move-up buyers, says Sturtevant.
In 2024, 36% of sellers traded up, purchasing a larger home, and 52% of sellers purchased a newer home, according to data from NAR’s 2024 Profile of Home Buyers and Sellers.
Why are people selling?
Even though that fortunate group of pandemic-era homebuyers were able to take advantage of those low rates, that rate-lock is proving to not be enough to keep them in their homes.
Many of those considering selling fall into two main groups: those moving for changing family and financial circumstances and those making a move based on their career.
For homeowners in their 30s, 36.7% are moving due to a change in their career and 34.4% are moving for family reasons.
Homeowners in their 40s prioritized the reverse. A slightly larger proportion—43.8%—planning to sell in 2025 are making that decision based on family circumstances, while 25.8% are selling due to job-related reasons.
Through Bright MLS’ market research in the region extended from New Jersey to Virginia, Sturtevant has found that a portion of those moving for job-related reasons are doing so to be closer to the office.
“We saw that the locations and neighborhoods 50 – 60 miles out from the central city had some of the fastest home price appreciation during the pandemic,” says Sturtevant. “We do know, from our own housing market data in our region, that there is renewed pressure on prices closer in—in that first ring of suburbs, 10 – 15 miles away from the central city.”
These homesellers want shorter commute times.
“We have seen—in some of our other data, and anecdotally, from our agents—that some people who have purchased during the pandemic and moved further out are now finding that even having to commute two to three days a week into a centrally located office is a lot,” Sturtevant said.
“Boomers aren’t going anywhere”
When RISMedia spoke to Sturtevant about the study, she revealed that she initially wanted to conduct the study to see the results from the boomers.
“My theory was that next year, it was going to be the baby boomers who unleashed all the supply,” she says. “They had all this equity in their house. Many of them owned their homes outright. They’d been shut down by the pandemic and they had to stay put. Their adult children had moved away, so they were going to be like ‘this is the time.’”
Most boomers are staying in their homes and there is not much that can get them to change their minds.
“Boomers aren’t going anywhere,” Sturtevant says. “Those homes that we might hope would come on the market because they’re too big for two-person households are not going to happen anytime soon.”
Of those surveyed, only about 6% of homeowners aged 60 and older said they were planning to sell their home in 2025, with the desire to downsize cited as the most common reason for moving. More than half (51.4%) of boomers said that nothing could make them sell their homes.
