2025 ServiceLink State of Homebuying Survey
2025 Reveals Opportunities for Investors
by Joseph Ticchione
Today’s youngest homebuyers, Gen Z, are ready to make their move and enter the market. But they also are quick to walk away if they do not find exactly what they are looking for.
ServiceLink recently released its 2025 State of Homebuying Report which found that the eagerness to buy a home is growing for those born between 1997 and 2012. Sixty-seven percent of Gen Z respondents indicated they plan to purchase a home in 2025, up from 63% who said the same in 2024.
However, 58% of Gen Z respondents this year also indicated that they abandoned the home-buying process in the last 12 months due to high home prices and interest rates and changes to their personal finances.
For investors, this could mean the competition is not as thick as it seems.
The report, which is in its fifth year, features data from 1,526 individuals who either purchased a home or tried to purchase a home in the last four years. The report dives into buyers’ current desires, their deal breakers and their outlook on the future. Investors can benefit from these findings by having a clear look into buyers’ and renters’ decision-making processes, knowing where there is an opportunity to step in and optimize their investment.
Let’s further break down the data:
Wavering competition
While there is an eagerness — especially among younger generations — to buy a home in 2025, today’s buyers also are not going to pull the trigger unless they find the right fit. So, while it might initially seem like there is a lot of competition for investors looking for their next purchase, those seasoned in the space could seize the opportunity to gain the upper hand by being a little more aggressive with their bids.
Overall, 25% of respondents across all generations said they were unsuccessful in their pursuit of homeownership over the last four years. Their reasoning? In addition to high costs and changing financial situations, survey respondents indicated too much of a down payment was required for them to move forward.
When it comes to interest rates, respondents, on average, said they have a current rate of 5% and would be willing to go as high as 5.6% for a new purchase. Gen Z respondents, with an average current interest rate of 5.1%, indicated they would be willing to go as high as 5.8% to buy a home. With the 30-year fixed mortgage rate currently sitting around 6.75% (as of April 2025), today’s rates aren’t low enough for these highly eager buyers to take the plunge. Investors should take note that there is less competition than it seems at first glance, and this could be to their advantage.
To buyers, size and location matter
Today’s homebuyers know what they want and that’s space. Sixty percent of buyers indicated their top desire is a larger home with more space — a 17% surge from 2024. Thirty-nine percent of respondents also said they want to see more room between homes. On the flip side, 51% of those who walked away from buying a home said they did so because the size of the home was too small.
Given this buyer preference, investors likely will find a less crowded niche if they focus on smaller properties. However, if the rental market begins to shift with renters having the same mindset as homebuyers and seeing a larger space, investors may need to pivot in the geographic areas where they are buying so they can offer the suburban experience with more space that their clients desire.
Keeping today’s renters in mind
Another top desire for today’s buyers is the need for dedicated office/flex space, with 30% of respondents saying that was vital to their purchase. For investors, this is an opportunity to switch up their marketing and look at what renters are seeking. Would that third bedroom market better as a flexible space or an office? This is something investors should consider.
A large majority of renters — specifically those who attempted to buy a home in the last four years — say they are looking to buy. Seventy-five percent of renters surveyed said they plan to buy a home in 2025, up from 69% of renters in 2024. Like the Gen Z population, renters also show that they are willing to walk away if conditions are not right. Seventy-one percent of renter respondents indicated they ultimately decided against buying a home in the last 12 months. Their main reasons, like the others, were that options were too expensive (61% of renting respondents) and mortgage rates were too high (49% of renting respondents).
For investors, this once again presents an opportunity. Investors who are willing to spend a little more upfront for the cost of entry might be able to edge out the competition, which not only adds a new property to their portfolio but also keeps their client base — renters — solid.
Auction and the decline of fix-and-flip
Auction remains a viable option for buyers at all levels, according to survey results where 50% of respondents said they are willing to purchase at auction. But those actually proceeding down that path is likely a much smaller number.
Thirty-nine percent of those interested in purchasing at auction say they want to use the property as a primary residence. Purchasing a property at auction as a fix-and-flip has seen a decline, with only 14% of respondents saying they would go that route this year, down from 23% in 2024 and 31% in 2022. This mirrors outside findings that indicate that investors have cut back on fix-and-flip.
A study by Lending One and ResiClub indicated that in the last year fix-and-flip saw its biggest cut back since 2007. However, reports also indicate that investors experienced a minor increase in profit margins in the last year and 89% of home flippers plan to flip at least one home in 2025. For investors, this could be another opportunity, if prices are right, to niche down in a less popular space.
Leveraging technology
Investors who are looking to save time and money while making adjustments to their portfolio should embrace the latest technology. Respondents to the State of Homebuying Report said the biggest benefits of technology are its convenience and ease of use (59%), the time savings it brings (51%), flexibility to make progress on their own schedule (45%), transparency into the process (36%) and cost savings (31%).
This all holds true for investors, too. Working with technology rich partners when looking to expand their portfolio or sell an aset will make the process faster, more efficient and reduce
costs for investors.
Rising equity: An opportunity for new investors
For those who own a home, their equity continues to grow year-over-year. Twenty-three percent of respondents indicated they have more than $200,000 in home equity this year, up from 19% in 2024. Another 16% said they have more than $100,000 in home equity, up from 15% the previous year.
For those considering entering the investment space, this could be an opportunity. If they own a home that is appreciating in value, this is an ample opportunity to take out a home equity line of credit or second mortgage to free up cash to enter the investor space and diversify their own financial portfolio.
To download the full report, visit go.svclnk.com/state-of-homebuying-report-2025.html
Methodology // The 2025 ServiceLink State of Homebuying Report (SOBHBR) features relevant data from a survey of 1,526 individuals who either purchased a home or tried to purchase a home within the past four years.
