Buyers Want Affordability — And the Market’s Finally Shifting

A recent Bank of America survey asked prospective homebuyers what would make them feel more confident about entering the market. The answer was clear: lower prices and better mortgage rates.

The good news? Both of those factors are starting to move in the right direction.

Prices Are Cooling Down

In the last few years, home prices rose at record speed. Between 2020 and 2021, values surged by 20% in just twelve months. Today, growth has slowed to single digits nationally.

This doesn’t mean prices are crashing — but it does mean the market is normalizing. Some areas will still see increases, while others may see slight declines. Either way, the rapid pace has eased, giving buyers more room to plan.

Mortgage Rates Are Easing

Rates have also pulled back from their recent highs, and even a small drop can significantly impact monthly payments.

As Bright MLS Chief Economist Lisa Sturtevant notes: “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.”

Forecasts suggest rates will remain in the low-to-mid 6% range into next year, which is considerably better than the peaks seen not long ago.

While affordability challenges haven’t disappeared, conditions are shifting. For buyers who stepped back earlier this year, the combination of moderating prices and easing rates could provide a new opportunity to re-engage with the market.

The two biggest concerns for today’s buyers — high prices and high rates — are beginning to ease. If you’re considering a move, now may be a good time to connect with a local real estate agent to see how these changes are playing out in your area.