A recent survey from Bank of America asked would-be homebuyers what would make them feel more confident about jumping into the market. No surprise here: the answers were all about affordability. Buyers want lower home prices and lower mortgage rates (see graphic below).
Here’s the good news: while the broader economy may still feel uncertain, we are seeing shifts in the housing market that touch both of these concerns. Let’s break it down.
Prices Are Moderating
Over the last few years, home prices surged at an almost dizzying pace. For example, from 2020 to 2021, they jumped nearly 20% in just 12 months. That pace left many buyers feeling locked out of the market.
Today, things look different. Nationally, experts are projecting single-digit price growth this year. That’s a much more manageable pace and a return to something closer to normal.
It’s important to note that pricing trends vary by market. Some areas will continue to rise, while others may see slight declines. But the bigger picture is this: prices aren’t crashing, but they are moderating. For buyers, that makes the process less intimidating and gives you more clarity when planning your budget.
Mortgage Rates Are Easing
The other big shift? Mortgage rates. After peaking not long ago, they’ve recently edged down, giving buyers some relief.
As Lisa Sturtevant, Chief Economist at Bright MLS, explains:
“Slower price growth coupled with a slight drop in mortgage rates will improve affordability and create a window for some buyers to get into the market.”
Even a small rate change can make a big difference in what you pay each month. While rates will likely remain somewhat volatile, most experts expect them to hover in the low to mid-6% range this year, which is much better than where we were just a few months ago. And if the economy shifts, they could dip further.
Why This Matters
Confidence in the broader economy may feel shaky, but the housing market is quietly adjusting. Prices are moderating. Rates are easing. Together, these trends are creating more opportunities for buyers who may have felt sidelined not too long ago.
Is this a magic fix for affordability? No. But it is a sign that the market is moving in a direction that could work in your favor.
Bottom Line
Both of the top concerns for buyers, prices and rates, are showing movement in the right direction. If you’ve been waiting for a shift before making your move, now may be the time to take another look.
Every market is different, so let’s talk about what’s happening right here in our community. I’ll walk you through the latest trends, what they mean for you, and how to make the most of this moment.
