Housing Market Uncertainty at 3-Year High: Bank of America
David Garner
David GarnerBank of America 2025 Homebuyer Insights: What International Real Estate Investors Need to Know
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For international real estate investors, understanding the U.S. housing market is crucial. A new report from Bank of America gives us a clear look at what homebuyers and homeowners are thinking in 2025. This information is key for planning your U.S. property investment. It helps you find chances for consistent cash flow and build long-term wealth.
This article breaks down the Bank of America 2025 Homebuyer Insights Report. We will look at key data and what it means for the housing market. Most importantly, we will explain the direct impacts for you, the real estate investor.
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Key Takeaways: Homebuyer Report & Investor Strategy
- High Uncertainty: Many people feel unsure about the housing market. This includes both those who own homes and those who want to buy.
- Affordability is Top Concern: High prices and interest rates worry most potential buyers.
- Homeowners Not Selling: Many homeowners are not selling their homes. This is because they have low mortgage rates now.
- More Renters: Because buying is hard, many people plan to rent for longer. This is good news for rental property investors.
- New Opportunities: The market is changing. This creates new ways for international investors to find good deals and grow their long-term wealth.
Related: Top U.S. Real Estate Markets for Investors in 2025: States, Cities, and Neighbourhoods
Many Feel Unsure About the Housing Market
The Bank of America report shows that many people are feeling uncertain about the U.S. housing market. This affects how they plan to buy or sell homes.
Overall Market Sentiment (2025)
| Group | % Feeling Uncertain |
|---|---|
| All Consumers | 60% |
| Prospective Buyers | 70% |
| Current Homeowners | 50% |
Source: Bank of America 2025 Homebuyer Insights Report, Page 3
This high level of uncertainty means people are thinking carefully. They are waiting to see what happens with prices and rates.
Top Concerns for Prospective Buyers
What worries people who want to buy a home? The report clearly points to money matters.
| Concern | % of Prospective Buyers Concerned |
|---|---|
| Affordability of Homes | 77% |
| High Interest Rates | 75% |
| Current Economic Climate | 65% |
| Lack of Available Homes | 60% |
Source: Bank of America 2025 Homebuyer Insights Report, Page 3
These concerns are making it hard for many to buy. This has a direct impact on the rental market.
Related: U.S. Real Estate Market Forecast and Expert Predictions 2025 to 2030
Homeowners Are Staying Put (The ‘Lock-in Effect’)
One big reason for fewer homes for sale is that current homeowners are not selling. They are holding onto their low mortgage rates. This is called the “lock-in effect.”
Homeowner Reluctance to Sell (2025)
| Reason for Reluctance | % of Homeowners |
|---|---|
| High Interest Rates on New Mortgage | 62% |
| Uncertainty About Housing Market | 50% |
| Difficulty Finding a New Home | 45% |
Source: Bank of America 2025 Homebuyer Insights Report, Page 6This means fewer homes are coming onto the market. This keeps prices high and makes it harder for new buyers.
Matt Vernon, Head of Retail Lending at Bank of America, said: “The current housing market is complex, with high interest rates, limited inventory, and affordability challenges creating uncertainty for many.” Source: Bank of America Newsroom Press Release (May 2025).
Related: NAR Expects House Price Growth in 2025 and 2026
What This Means for International Real Estate Investors
The Bank of America report offers key insights for international real estate investors. The challenges faced by homebuyers create clear opportunities in the rental market. This can lead to consistent cash flow rentals and help build long-term wealth.
More Demand for Rental Properties
When buying a home is hard, more people rent. This is a direct benefit for rental property investors.
- Renting Longer: The report shows that 50% of prospective buyers are thinking about renting for a longer time. This means a bigger pool of potential tenants for your properties.
- Moving to Affordable Rentals: Also, 40% of prospective buyers are looking to move to more affordable areas. These areas often have strong rental markets.
This increased demand means:
- Higher Occupancy Rates: Your rental properties are more likely to stay full.
- Stable Rental Income: Steady demand helps keep rents consistent. This is crucial for consistent cash flow.
- Reduced Vacancy Costs: Fewer empty properties mean more reliable income.
Related: Why More Americans Are Choosing to Rent Instead of Buy
Opportunities in Changing Markets
The report highlights how people are adapting. This creates new chances for investors.
- Gen Z is Active: Gen Z (44%) is more likely to buy a home in the next three years than Millennials (33%). This shows a future wave of buyers.
- Adapting Strategies: People are considering different ways to get a home. This includes buying smaller homes or fixer-uppers. This opens up options for investors who can offer these types of properties as rentals.
Related: These Americans Want to Live in Single Family Homes
Long-Term Wealth Building
By focusing on these trends, international investors can build long-term wealth.
- Strategic Buying: Look for properties in areas where people are moving for affordability. These are often markets with strong rental demand.
- Steady Returns: A large renter pool means more predictable income. This helps pay down mortgages. It also allows for reinvestment.
- Market Resilience: Investing in markets supported by strong rental demand can make your portfolio more resilient. It is less affected by ups and downs in the home-buying market.
Related: Map Shows Investors Are Buying in These Affordable U.S. Markets
Strategies Prospective Buyers Are Considering
The report shows that prospective homebuyers are not giving up. They are just changing their plans. This creates different types of rental needs.
Alternative Paths to Homeownership (Prospective Buyers)
| Strategy | % Considering |
|---|---|
| Renting for a Longer Period | 50% |
| Moving to a More Affordable Area | 40% |
| Buying a Smaller Home | 35% |
| Buying a Fixer-Upper | 28% |
| Co-buying with Friends/Family | 20% |
Source: Bank of America 2025 Homebuyer Insights Report, Page 7
This data tells international investors that:
- There will be a continued strong need for rental properties of all sizes.
- Affordable areas will see more people moving in, boosting rental demand there.
- Smaller homes and fixer-uppers, once repaired, could also become good rental properties.
Related: U.S. Housing Affordability at Historic Lows – JPMorgan
Conclusion: Adapting Your Strategy for Success
The Bank of America 2025 Homebuyer Insights Report paints a clear picture. The U.S. housing market faces uncertainty. High prices and interest rates are making homeownership tough for many. But this creates a strong opportunity for international real estate investors.
The growing number of people choosing to rent, or moving to more affordable areas, means high demand for rental properties. By understanding these shifts and adapting your U.S. property investment strategy, you can secure consistent cash flow rentals. This will help you build long-term wealth in a changing market.
Previous Article: Is it Better to Rent or Buy a Home in the USA in 2025?
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“Having personally invested in over 120 US rental properties from overseas, I know the true value of getting the right advice and support.
David Garner – Cashflow Rentals
GROW YOUR WEALTH WITH U.S. REAL ESTATE
Start your US real estate investment journey today, and book a Free 1-2-1 Discovery Call with a member of our senior management team.
“Having personally invested in over 120 US rental properties from overseas, I know the true value of getting the right advice and support.
David Garner – Cashflow Rentals
Frequently Asked Questions (FAQs) About the 2025 Homebuyer Insights Report
- Q1: What is the main finding of the Bank of America 2025 Homebuyer Insights Report? A1: The report shows that 60% of U.S. consumers (homeowners and prospective buyers) feel uncertain about the housing market. Affordability and high interest rates are top concerns for those looking to buy.
- Q2: Why are many homeowners reluctant to sell their homes in 2025? A2: A major reason is the “lock-in effect.” 62% of homeowners are reluctant to sell because they would face much higher interest rates on a new mortgage compared to their current one.
- Q3: How does this report benefit international real estate investors? A3: The report highlights a growing need for rental properties. Many prospective buyers plan to rent longer (50%) or move to more affordable areas (40%). This means a strong tenant pool for international investors seeking consistent cash flow rentals and long-term wealth.
- Q4: What alternative strategies are prospective homebuyers considering? A4: Prospective buyers are considering renting for a longer period (50%), moving to a more affordable area (40%), buying a smaller home (35%), buying a fixer-upper (28%), or co-buying with friends/family (20%).
- Q5: Which generation shows more optimism about buying a home soon? A5: Gen Z (44%) is more optimistic about buying a home within the next three years compared to Millennials (33%), according to the report.
- Q6: Where can I find the full Bank of America 2025 Homebuyer Insights Report? A6: You can access the full report PDF here: Bank of America 2025 Homebuyer Insights Report. You can also read the press release here: Bank of America Newsroom Press Release (May 2025).
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