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Locked In Place: Why Millions of Homeowners Can’t Afford to Move
For years, America’s housing challenges have been framed as a simple supply-and-demand problem—low inventory, rising interest rates, and affordability constraints. But beneath those familiar headlines lies a deeper, structural issue we unintentionally created.
Today, millions of homeowners are wealthier on paper than ever before. They hold record levels of equity and historically low mortgage rates. Yet many of them cannot afford to move.
Not because they lack buying power.
But because moving no longer makes financial sense.
The Mortgage Lock-In Effect
Recent national data shows just how severe this gap has become. According to Realtor.com, the typical U.S. homeowner currently pays about $1,300 per month in principal and interest. Selling that home and purchasing a “typical” home today would require a monthly payment of approximately $2,236—a 73% increase in housing cost.
This growing gap is known as the mortgage lock-in effect. Homeowners who secured ultra-low rates during 2020–2021 are effectively trapped by them. Giving up a 3% mortgage to buy into today’s higher-rate, higher-price market often means paying significantly more—sometimes for a comparable or even smaller home.
The market isn’t frozen because people don’t want to move.
It’s frozen because moving comes with a financial penalty.
From Pandemic Stimulus to Market Stagnation
When mortgage rates fell below 3% during the pandemic, buyers surged into the market. Millions refinanced. Millions more purchased homes. Cheap financing softened the sting of rising prices, allowing values to climb rapidly—often 25% to 40% in many markets.
When inflation followed, rates snapped back sharply. Prices, however, did not.
The same mechanism that once encouraged mobility now suppresses it.
Federal housing research confirms this effect. A Federal Housing Finance Agency (FHFA) working paper estimates that rising mortgage rates have prevented millions of otherwise normal home sales by discouraging owners from listing their homes.
Why Homeowners Are Staying Put
It’s easy to assume homeowners stay because they “love their homes.” Many do—but that only tells part of the story. The real constraint is financial.
Homeowners face a stark choice:
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Give up an exceptionally low interest rate
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Buy into a market with both higher prices and higher borrowing costs
Even selling at a profit often results in higher monthly expenses and reduced flexibility. Equity becomes difficult to use when accessing it raises your cost of living.
This isn’t a lifestyle decision.
It’s a structural trap.
The Ripple Effect on the Housing Market
When homeowners can’t move, inventory shrinks. When inventory shrinks, affordability worsens—especially for first-time buyers.
This dynamic is already visible. Sellers are increasingly choosing to pull listings rather than cut prices or trade into higher-rate mortgages. According to Investopedia, delistings surged 45% year over year, highlighting the reluctance of owners to transact under current conditions.
Low inventory, in this context, is not the cause—it’s the symptom.
How We Unlock a Trapped Housing Market
This is not a short-term cycle. It’s a structural flaw that requires structural solutions:
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Portable and assumable mortgages that allow buyers to take over existing low-rate loans
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Incentives for downsizing and life transitions, particularly for long-time homeowners
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Housing built for real demand, including townhomes, ADUs, and smaller, more attainable options
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Modern mortgage products designed for flexibility and mobility—not just long-term lock-in
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Greater transparency around equity use, so homeowners understand the true cost of moving
The Bottom Line
We built a housing system that rewards people for staying put and penalizes them for moving. The result is equity without freedom, ownership without mobility, and a market that struggles to function.
Mobility is not a luxury. It is a cornerstone of economic health and household well-being.
If we want a housing market that truly works, we must stop celebrating locked-in equity and start creating real pathways forward.
The American Dream only works if people can move with it.
Sources:
Source: Realtor.com – A 73.2% Spike in Monthly Payments for Moving Traps U.S. Homeowners in Place
Source: Investopedia – Delistings Jump 45% as Sellers Pull Homes Rather Than Cut Prices
Source: FHFA – The Lock-In Effect of Rising Mortgage Rates (PDF)
Why Buying a Home Still Pays Off in the Long Run
Renting can feel much less expensive and much simpler than buying a home, especially right now. No repairs, no property taxes, no worrying about mortgage rates – you just pay the bill and move on with your life.
But here’s the part people don’t talk about enough: renting doesn’t help you build your financial future. Meanwhile, homeowners grow their net worth just by owning a home.
So, if you’ve been wondering whether buying is still worth it, the long-term math is clearer than you might think.
Renting vs. Owning: How the Costs Really Compare
Let’s break down one of the key differences between renting and buying. When you rent, your payment goes to your landlord, and then it’s gone. When you own, part of your payment comes back to you in the form of equity (the wealth you build as the value of your home increases, and you pay down your home loan).
So, while renting may seem more affordable now, you have to remember it comes at a long-term cost: you’re not building your wealth. And it turns out, that’s a bigger miss than you may expect.
First American recently analyzed the long-term financial impact of renting versus owning a home. They compared mortgage payments, property tax, insurance, repairs, and maintenance against the equity gained through home price appreciation and paying down the mortgage. And they did that during several different time frames to see if it tells a consistent story:
- 2006: the start of the housing bubble
- 2015: 10 years ago
- 2019: just before the pandemic (the last normal years in the market)
- 2022: when mortgage rates jumped
In each time frame, two things were true: renters ended up losing money over time. And homeowners gained it.
Here’s some data so you can see this play out. Each color represents one of the key time frames. The solid lines show the buyer’s investment over time and how their net worth actually grew the longer they lived in their home. The dashed line represents the renter’s investment. In the end, they sank more and more cash into renting without gaining any financial benefit.
The takeaway is simple: time in a home builds wealth. Time renting doesn’t.
Basically, homeowners come out ahead. And the analysis shows that’s even after you factor in the other expenses that come with homeownership, like insurance, repairs, and property taxes. And that’s the case for every time frame First American looked into.
On the flip side, renters spent money on their rent, but didn’t gain any long-term financial benefit. That’s true no matter what window of time you look at in the study.
Now, that doesn’t mean buying always beats renting in the short term. But the longer you own, the wider the wealth gap becomes.
Affordability Is Starting To Improve
You might still be thinking, “Okay, but buying feels out of reach for me right now.” Fair.
The past few years haven’t been easy for buyers. But things are starting to shift. Mortgage rates have come down this year, home prices are softening, and incomes have been rising. And according to Zillow, typical monthly payments have gotten a little easier compared to this time last year. Not by a lot, but enough to make a difference.
No, buying isn’t suddenly easy. But it is easier than it was just a few months ago. And in the long run, history shows it’s worth it.
Bottom Line
Renting may feel less expensive today, but owning is what builds real wealth over time. And with affordability starting to improve, the path to homeownership may be opening up more than you think.
If you’re curious what buying could look like for you, give me a call and I can help you plan your next move, pressure-free.
Keeping Current Matters
Would You Let $80 a Month Hold You Back from Buying a Home?
I found this article from Keeping Current Matters very insightful! I hope you will too
Would You Let $80 a Month Hold You Back from Buying a Home?
A lot of buyers are stuck in “wait and see” mode right now. They’re watching rates hover a little above 6% and thinking, I’ll buy once they hit the 5s. Because who doesn’t want a better rate?
But here’s the thing: that 5.99% number might not save you as much as you think.
Affordability is still a challenge. There’s no question about that. But the market has given savvy buyers a head start. Mortgage rates have already come down over the past few months. And the drop we’ve seen saves you more than you’d think.
How Much You’ve Already Saved, Without Realizing It
Let’s put some real numbers to it. Rates peaked for the year in May when they inched above 7%. But since then, they’ve been slowly declining. Now, they’re sitting in the low 6s. And while that may not sound like a big deal, that change translates to real dollars.
According to data coming out of Redfin, the typical monthly payment on a $400,000 home is already down almost $400 since May.
That means if you’re buying a home now, you’re saving hundreds of dollars every month compared to what you would have been able to get earlier this spring. That’s real money that makes a real difference for buyers who paused their plans because they thought homeownership was out of reach.
And while it may be tempting to wait even longer to see bigger savings, that’s a gamble that could cost you. Here’s why.
Where Experts Say Rates Are Headed
For starters, most experts say mortgage rates are likely to stay pretty much where we are today throughout 2026. So, there’s no guarantee we’ll see a rate much lower than what we have now. Only one expert forecaster is saying rates could fall into the upper 5s next year (see graph below):
And even if rates do dip below 6%, the extra savings you’re holding out for won’t move the needle as much as you might expect.
The Real Math Behind a 5.99% Rate
Let’s break it down. If rates come down to 5.99% from where they’ve been lately that’s a difference of only about $80 a month on an average priced home – give or take a bit based on your price point and the rate your lender quotes you (see chart below):
Eighty dollars. That’s it. And for the typical family, that’s about one dinner out (or one dinner in, if you have it delivered). That’s not enough to change the game for most buyers. But the savings of nearly $400 we already have compared to when you paused your search in the spring? That might be.
So, the question to ask yourself is this:
Is an extra $80 savings really worth the wait?
Because while you’re holding out for that small dip, the bigger opportunity might be slipping away.
When Rates Fall, Competition Follows
Right now, you have more homes to choose from, sellers who are ready to negotiate to get a deal done, and fewer buyers to compete with. But once rates fall below 6%, buyer mindsets will shift and all of that will change.
The National Association of Realtors (NAR) reports that if rates hit 6%, about 5.5 million more households will be able to afford the median-priced home. Even if only a small fraction of them decide to buy, that could mean hundreds of thousands of buyers getting back into the market.
That creates more competition for you, which would push home prices even higher – maybe high enough to cancel out the extra savings you waited for.
So, if you’re waiting for rates below 6%, just keep in mind… that extra $80 may not be worth it in the grand scheme of things.
Bottom Line
You don’t have to wait for 5.99%. You have the chance to move (and save) right now. So, ask yourself: Would you let $80 hold you back from buying a home?
If you find a home you love and the math makes sense, getting ahead may be the best strategy. Connect with an agent or lender to run your numbers. That way you can see what you’re working with in your market.
Thought the Market Passed You By? Think Again.
Have you felt like the housing market passed you by? The latest blog from Keeping Current Matters reveal that might not be the case. With affordability improving and more homes hitting the market, buyers in Placer County and beyond are finding new opportunities. This article breaks down what these trends mean locally and why now could be the perfect time to make your move.
Suzanne Volkman
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If you stepped back from your home search over the past few years, you’re not alone – and you’re definitely not out of options. In fact, now might be the ideal time to take another look. With more homes to choose from, prices leveling off in many areas, and mortgage rates easing, today’s market is offering something you haven’t had in a while: options.
Experts agree, buyers are in a better spot right now than they’ve been in quite a long time. Here’s what they have to say.
Affordability Is Finally Improving
Lisa Sturtevant, Chief Economist at Bright MLS, says affordability is finally starting to turn the corner:
“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.”
Mortgage rates have eased from their recent highs, price growth has slowed, and that one-two combo is making homes more affordable than they’ve been in months.
There Are More Homes on The Market
And a big reason prices are easing is because there are more homes on the market. According to the latest from Realtor.com, there are 17% more homes for sale today than there were at this time last year. That means more options, less competition with other buyers, and a chance to find the space that actually works for you.
Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), shares:
“Homebuyers are in the best position in more than five years to find the right home and negotiate for a better price. Current inventory is at its highest since May 2020, during the COVID lockdown.”
Take a look at the numbers.
As Yun notes, inventory is up everywhere. Compared to this time last year, every region of the country has more homes on the market than at this time last year (see graph below):
That translates to more homes to choose from, whether you’re looking for a bigger backyard, a shorter commute, or finally ditching your rental.
But not all markets are the same…
When you compare current inventory growth to pre-pandemic norms (2017-2019), the picture changes a bit, depending on where you are (see graph below):
The green bars show where inventory has fully recovered (and even grown above pre-pandemic levels) in the South and the West. Supply, however, is still tighter in the Northeast and Midwest, as shown in the red bars, where inventory is still below normal.
And here’s why that’s still a win everywhere.
When you step back and look at the bigger picture, with inventory up in every region, that means more choices everywhere, even if some areas have more homes for sale than others.
And with fewer buyers in the market and more homes for sale, sellers are willing to negotiate to get a deal done.
All of that adds up to a win for today’s buyers.
And it’s also why working with a local expert really makes a difference. What’s happening in your zip code or neighborhood might look different than the national or regional trend. But the overall takeaway is clear: with more homes on the market, buyers have more leverage than they did a year or more ago.
So, if you stepped away from your search because things felt too competitive, too pricey, you were worried about finding a home, or it was all just too much to process, this could be your moment to take another look.
And if you’re not quite ready to go all in, that’s okay too. You can start by planning ahead. That means working with a trusted agent who can help you break down your budget, narrow your search, and make sure you’re prepped and ready when the right home hits the market.
Bottom Line
Want to know what’s happening in your local market? Feel free to give me a call and ask for a custom overview of what’s available right now, so you can learn how to be ready when the timing is right for you.
Because this isn’t 2021.
This isn’t even 2023 or 2024.
This is a new market – and you might be surprised by what you find.
Keeping Current Matters
Why You Don’t Need To Be Afraid of Today’s Mortgage Rates
Mortgage rates have been the monster under the bed for a while. Every time they tick up, people flinch and say, “Maybe I’ll wait.” But here’s the twist. Waiting for that perfect 5-point-something rate could end up haunting your wallet later.
The Magic Number
According to the National Association of Realtors (NAR):
“. . . a 30-year fixed rate mortgage of 6% would make the median-priced home affordable for about 5.5 million more households—including 1.6 million renters. If rates were to hit that magic number, it’s likely that about 10%—or 550,000—of those additional households would buy a home over the next 12 or 18 months.”
When the market hits that mortgage rate sweet spot, as expert forecasters are starting to say is more likely in 2026, the psychological shift to lower rates will kick in for more of today’s hopeful buyers. That will unleash some pent-up demand that’s been waiting on the sidelines, and the increase in activity will cause prices to rise.
And while a 5.99% rate might sound like a big win, if you’re waiting for that number to make your move, it might not actually save you as much as you think. Here’s how the math looks when you run the numbers (see chart below):
On a $400,000 mortgage, the difference between today’s rate (around 6.2%) and 5.99% is roughly $50 a month. That’s less than many people spend on weekly coffee runs or occasional DoorDash orders. And as prices tick up with more buyers in the market, that could quickly negate any of your potential savings.
So, if you’re waiting for 5.99%, that difference might not be worth missing out on today’s opportunities, like having more homes to choose from, better negotiation leverage with today’s sellers, and fewer buyers out there looking for the same houses.
Because the reality is, those benefits start to slip away when more buyers begin to make their moves – and a rate under 6% is exactly they’re waiting for.
Why Acting Now Makes Sense
Jessica Lautz, Deputy Chief Economist and VP of Research at NAR, says:
“Over the last 5 weeks, mortgage rates have averaged 6.31%. This has provided savvy buyers a sweet spot to reexamine the home search process with more inventory, widening their choices.”
And like Matt Vernon, Head of Retail Lending at Bank of America, notes:
“Rather than waiting it out for a rate that they like better, hopeful homebuyers should assess their personal financial situation—if the house is right for them, and the upfront and monthly payments are affordable, it could be the right chance to make a move.”
Bottom Line
If moving at today’s rate scares you, remember, waiting doesn’t always pay off. Once rates dip below 6%, as some experts project they’ll do next year, more buyers (and higher prices) will be back.
So, don’t be afraid of today’s mortgage rates. Because if you’re ready, this might just be your chance to make a move before the market wakes up again.
Keeping Current Matters
To find out what you can afford, head over to my Financial Calculator page.
Why Overpricing Is Hurting Sellers in Today’s Market
If you’re a homeowner thinking about selling—or already on the market—this is a must-read. Ryan Lundquist of the Sacramento Appraisal Blog has penned a powerful open letter to sellers whose homes aren’t moving because they’re priced too high. In today’s shifting market, buyers are more selective than ever, and homes that don’t check all the boxes—especially on price—are being passed over.
Ryan breaks down why the red-hot market of 2021 is behind us, and how today’s buyers are demanding more for their money. He also introduces the concept of the “purple pill”—a combination of price reductions and buyer concessions—as a strategy for sellers to stay competitive.
If you’re wondering why your home isn’t selling or want to avoid common pricing pitfalls, I highly recommend reading the full post. It’s honest, insightful, and packed with practical advice.
2026 Housing Market Outlook
After a couple of years where the housing market felt stuck in neutral, 2026 may be the year things shift back into gear. Expert forecasts show more people are expected to move – and that could open the door for you to do the same.
More Homes Will Sell
With all of the affordability challenges at play over the past few years, many would-be movers pressed pause. But that pause button isn’t going to last forever. There are always people who need to move. And experts think more of them will start to act in 2026 (see graph below):
What’s behind the change? Two key factors: mortgage rates and home prices. Let’s dive into the latest expert forecasts for both, so you can see why more people are expected to move next year.
Mortgage Rates Could Continue To Ease
The #1 thing just about every buyer has been looking for is lower mortgage rates. And after peaking near 7% earlier this year, rates have started to ease.
The latest forecasts show that could continue throughout 2026, but it won’t be a straight line down (see graph below):
There’s a saying: when rates go up, they take the escalator. But when they come down, they take the stairs. And that’s an important thing to remember. It’ll be a slow and bumpy process.
Expect modest improvement in mortgage rates over the next year but be ready for some volatility. There will be volatility along the way as new economic data comes out. Just don’t let it distract you from the bigger picture: the overall trend will be a slight decline. Forecasts say we could hit the low 6s, or maybe even the high 5s.
And remember, there doesn’t have to be a big drop for you to feel a change. Even a smaller dip helps your bottom line.
If you compare where rates are now to when they were at 7% earlier this year, you’re already saving hundreds on your future mortgage payment. And that’s a really good thing. It’s enough to make a real difference in affordability for some buyers.
Home Price Growth Will Be Moderate
What about prices? On a national scale, forecasts say they’re still going to rise, just not by a lot. With rates down from their peak earlier this year, more buyers will re-enter the market. And that increased demand will keep some upward pressure on prices nationally – and prevent prices from tumbling down.
So, even though some markets are already seeing slight price declines, you can rest easy that a big crash just isn’t in the cards. Thanks to how much prices rose over the last 5 years, even the markets seeing declines right now are still up compared to just a few years ago.
Of course, price trends will depend on where you are and what’s happening in your local market. Inventory is a big driver in why some places are going to see varying levels of appreciation going forward. But experts agree we’ll see prices grow at the national level (see graph below):
This is yet another good sign for buyers and overall affordability. While prices will still go up nationally, it’ll be at a much more sustainable pace. And that predictability makes it easier to plan your budget. It also gives you peace of mind that prices won’t suddenly skyrocket overnight.
Bottom Line
After a quieter couple of years, 2026 is expected to bring more movement – and more opportunity. With sales projected to rise, mortgage rates trending lower, and price growth slowing down, the stage is set for a healthier, more active market.
So, the big question: will you be one of the movers making 2026 your year?
Keeping Current Matters
Why 50% of Homes Are Selling for Under Asking and How To Avoid It
If your selling strategy still assumes you’ll get multiple offers over asking, it’s officially time for a reset. That frenzied seller’s market is behind us. And here are the numbers to prove it.
From Frenzy to “Normal”
Right now, about 50% of homes on the market are selling for less than their asking price, according to the latest data from Cotality.
But that isn’t necessarily bad news, even if it feels like it. Here’s why. The wild run-up over the last few years was never going to be sustainable. The housing market needed a reset, and data shows that’s exactly what’s happening right now.
The graph below uses data from Zillow to show how this trend has shifted over time. Here’s what it tells us:
- 2018–2019: 50–55% of homes sold under asking. That was the norm.
- 2021–2022: Only 25% sold under asking, thanks to record-low rates and intense buyer demand.
- 2025: 50% of homes are selling below asking. That’s much closer to what’s typical in the housing market.
Why This Matters If You’re Selling Your House
In this return to normal, your pricing strategy is more important than ever.
A few years ago, you could overprice your house and still get swarmed with offers. But now, buyers have more options, tighter budgets, and less urgency.
Today, your asking price can be make or break for your sale, especially right out of the gate. Your first two weeks on the market are the most important window because that’s when the most serious buyers are paying attention to your listing. Miss your price during that crucial period, and your sale will grind to a halt. Buyers will look right past it. And once your listing sits long enough to go stale, it’ll be hard to sell for your asking price.
The Ideal Formula
Basically, sellers who cling to outdated expectations end up dealing with price cuts, lower offers, and a longer time just sitting on the market. But homeowners who understand what’s happening are still winning, even today.
Because that stat about 50% of homes selling for under asking also means the other half are selling at or above – as long as they’re priced right from the start.
So, how do you set yourself up for success? Do these 3 things:
- Prep your house. Tackle essential repairs and touch-ups before you list. If your house looks great, you’ll have a better chance to sell at (or over) your asking price.
- Price strategically from day one. Don’t rely on what nearby homes are listed for. Lean on your agent for what they’ve actually sold for. And price your house based on that.
- Stay flexible. Be ready to negotiate. And know that it doesn’t always have to be on price. It may be on repairs, closing costs, or some other detail. But know this: today’s serious buyers expect some give-and-take.
If you want your house to be one that sells for at (or even more than) your asking price, it’s time to plan for the market you’re in today – not the one we saw a few years ago. And that’s exactly why you need a stand-out local agent.
Bottom Line
You don’t want to fall behind in this market.
So, talk to an me about what buyers in your area are paying right now. With my expertise and a strategy that gets your house noticed in those crucial first two weeks, anything is possible.
Keeping Current Matters
Patience Won’t Sell Your House. Pricing Will.
Waiting for the perfect buyer to fall in love with your house? In today’s market, that’s usually not what’s holding things up. And here’s why.
Let’s be real. Homes are taking a week longer to sell than they did a year ago. According to Realtor.com:
“Homes are also taking longer to sell. The typical home spent 60 days on the market in August, seven days longer than last year and now above pre-pandemic norms for the second consecutive month. This was the 17th straight month of year-over-year increases in time on market.”
Part of that is because there are more homes on the market. So, with more options for buyers to choose from, they aren’t getting snatched up quite as fast. But there’s another big reason: price.
The Average List Price Isn’t Going Up – and That Matters
Today, a lot of homeowners are overshooting their list price. They remember the big climb in home prices a few years ago, and they don’t realize how much has changed.
One of the most important, but often overlooked, changes in today’s housing market is this: average list prices have held steady for the past few years.
That’s a big shift from a typical market, where prices were rising steadily each year. And it’s significantly different than the 2021-2022 surge when sellers could set their price just about anywhere and still attract multiple offers over asking.
But now? That trend has leveled off – and sellers who want to stay competitive need to take note (see graph below):
Here’s what this says about today’s market. Buyers are a lot more price sensitive now. And sellers can’t keep trying to inch the bar higher, or their house will sit without any offers.
Homeowners who expect to bring in more than their neighbors did last year may be setting themselves up for a longer, more frustrating experience.
And while homeowners are starting to realize prices can’t keep climbing at such a rapid pace, the hiccup is that list prices aren’t actually coming down yet as a result. They’re hanging around, holding steady. And sellers who make this mistake are often holding onto hope that they’ll be able to eek a few more dollars out of their sale. But that’s the problem right there.
If you want to sell today, you need to be in line with where the market is today. Not last year. Not during the pandemic. Today.
Because buyers will skip over homes that feel overpriced, even if it’s only by a little. It’s not that they aren’t interested. It’s just that in a market with more homes to choose from, buyers can be more selective, and sellers don’t get the same benefit of the doubt. If your house isn’t priced to sell, buyers just move on. They’ve got other options anyway.
4 Signs Your Price May Be Too High
You may already be feeling this yourself. If your home is listed and you’re not seeing results, watch for these common red flags noted by Bankrate:
- You’re not getting many showings
- You haven’t gotten any offers (or you’ve only gotten lowball offers)
- Buyers that do come to see your house leave overly negative feedback
- Your house has been sitting on the market longer than the average for your area
If any of these sound familiar, know that waiting it out won’t fix it. But adjusting your price will.
So, What’s the Solution?
Work with your agent to make sure your house is positioned for today’s market. Depending on your what’s happening in your local area, a few weeks without traction can raise questions for buyers about whether your price is realistic. And don’t worry – it doesn’t have to be a big drop. Even a small adjustment can be enough to bring the right buyers through the door.
And if you’re worried you won’t get the high-ticket sale price you thought you would be able to land, keep in mind that your equity has probably grown quite a bit. Chances are, you’re still ahead of the game simply because you invested in a home over the last 5, 10, or more years. You’re still winning when you sell today.
Bottom Line
Patience isn’t a strategy. Pricing is.
If your home isn’t moving, the market is telling you something – and the right price can change everything. Your house will sell, if you price it strategically.
Keeping Current Matters
What Buyers Say They Need Most (And How the Market’s Responding)
A recent survey from Bank of America asked would-be homebuyers what would help them feel better about making a move, and it’s no surprise the answers have a clear theme. They want affordability to improve, specifically prices and rates (see below):
Here’s the good news. While the broader economy may still feel uncertain, there are signs the housing market is showing some changes in both of those areas. Let’s break it down so you know what you’re working with.
Prices Are Moderating
Over the past few years, home prices climbed fast, sometimes so fast it left many buyers feeling shut out. But today, that pace has slowed down. For comparison, from 2020 to 2021, prices rose by 20% in a 12-month period. Now? Nationally, experts are projecting single-digit increases this year – a much more normal pace.
That’s a sharp contrast to the rapid growth we saw just a few short years ago. Just remember, price trends are going to vary by area. In some markets, prices will continue to rise while others will experience slight declines.
Prices aren’t crashing, but they are moderating. For buyers, the slowdown makes buying a home a bit less intimidating. It’s easier to plan your budget when home values are moving at a much slower pace.
Mortgage Rates Are Easing
At the same time, rates have come down from their recent highs. And that’s taken some pressure off would-be homebuyers. As Lisa Sturtevant, Chief Economist at Bright MLS, says:
“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 drop in mortgage rates can mean a big difference in what you pay each month in your future mortgage payment. Just remember, while rates have come down a bit lately, they’re going to experience some volatility. So don’t get too caught up in the ups and downs.
The overall trend in the year ahead is that rates are expected to stay in the low to mid-6s – which is a lot better than where they were just a few short months ago. They may even drop further, depending on where the economy goes from here.
Why This Matters
Confidence in the economy may be low, but the housing market is showing signs of adjustment. Prices are moderating, and rates have come down from their highs.
For you, that may not solve affordability challenges altogether, but it does mean conditions look a little different than they did earlier this year. And those shifts could help you re-engage as we move into next year.
Bottom Line
Both of the top concerns for buyers are seeing some movement. Prices are moderating. Rates are easing. And both trends could stick around going into 2026.
If you’re considering a move, give me a call so that I can walk you through what’s happening in your area – and what it means for your plans.
