For many would-be homebuyers, the past few years have felt like trying to climb a mountain that keeps getting steeper. Rapidly rising home prices, surging mortgage rates, and economic uncertainty made the dream of homeownership feel just out of reach.

In fact, a recent Bank of America survey revealed that when asked what would make them feel more comfortable about buying, most buyers gave a clear answer: they want affordability to improve. More specifically, they want relief when it comes to home prices and mortgage rates.

And here’s the encouraging news: while challenges remain, there are signs that the housing market is slowly adjusting in ways that could benefit buyers. Prices are no longer climbing at the breakneck speed we saw just a few years ago, and mortgage rates—though still higher than historic lows—have eased from their recent peaks.

So, what does this all mean for you if you’ve been waiting on the sidelines? Let’s dig into the trends shaping the market right now and how they might help you step into homeownership with more confidence.

The Price Story: From Rapid Growth to a Healthier Pace

Not long ago, home prices were skyrocketing at record speeds. Between 2020 and 2021, the U.S. housing market saw prices climb nearly 20% in a single year. For many buyers, this felt overwhelming. The fear of being priced out kept people from even considering a move.

Fast forward to today, and the landscape looks different. While home prices are still rising, they’re doing so at a much more sustainable pace. Nationally, experts are projecting single-digit price growth this year—a sharp contrast to the double-digit increases of the pandemic years.

Why the Change?

Several factors are driving this moderation:

• Economic Conditions: Higher borrowing costs over the past two years cooled demand, which naturally slowed price growth.

• Increased Inventory in Some Markets: While housing supply is still limited overall, certain areas have seen more listings hit the market, giving buyers a bit more negotiating power.

• Stabilization After a Surge: The rapid gains of 2020–2022 were simply not sustainable long-term. The current pace reflects a return to more balanced conditions.

What Buyers Should Know

Price moderation doesn’t mean prices are crashing. It means they’re growing at a normal rate, which makes planning and budgeting far less intimidating.

Of course, the national picture doesn’t tell the whole story. Local conditions vary widely. Some areas—particularly those that saw the steepest pandemic-era price hikes—may see small declines. Others with strong job markets and limited supply may continue to see steady increases.

For buyers, this slower pace is welcome news. It creates breathing room to search for a home without the fear of runaway bidding wars and double-digit annual appreciation.

Mortgage Rates: From Peaks to a More Manageable Range

If home prices were the first punch to affordability, mortgage rates were the second. After hovering near historic lows in 2020 and 2021, rates surged dramatically in 2022 and 2023, topping 7% at one point. For many buyers, that jump added hundreds of dollars to their potential monthly payments, pushing homeownership out of reach.

But in recent months, there’s been a shift. Mortgage rates have pulled back from their highs, offering some relief to budget-conscious buyers.

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.”

Why Even Small Drops Matter

When it comes to mortgage rates, small movements have a big impact. For example, a half-point drop in the rate on a $400,000 loan can save buyers more than $100 per month on their mortgage payment. Over the life of a loan, that’s tens of thousands of dollars saved.

The latest projections suggest that mortgage rates will likely stay in the low-to-mid 6% range in the year ahead. While not as low as the 3% rates of the pandemic, they’re far better than the recent highs and represent a much more manageable environment for buyers.

There’s also a chance rates could dip further depending on how the economy evolves. Inflation, Federal Reserve policy, and job market strength all play a role. The bottom line? Today’s rates may not be perfect, but they’re significantly less intimidating than they were just a few months ago.

What This Means for Buyers

When you put the pieces together—moderating prices and easing rates—the housing market looks different than it did in the height of its frenzy. And for buyers, that shift can be empowering.

1. More Predictability in Budgeting

Rapidly rising prices and fluctuating rates made it hard to plan a home purchase. Now, with price growth slowing and rates trending lower, buyers can approach the process with greater confidence.

2. Less Pressure to Rush

During the peak of the market, many buyers felt forced to make lightning-fast decisions, often waiving contingencies or overbidding just to secure a property. Today, with fewer bidding wars and more balanced conditions, buyers have more time to evaluate options carefully.

3. Renewed Opportunity to Re-Enter the Market

Some buyers who paused their searches due to affordability concerns may find conditions more manageable now. While challenges remain, the combination of slower price growth and lower rates creates a window of opportunity for those who were previously priced out.

Addressing Buyer Concerns

Of course, affordability challenges haven’t disappeared entirely. Housing supply is still tight in many markets, and wages haven’t kept pace with housing costs in every region. But the market is showing signs of adjustment that matter.

For buyers who have been waiting for a better moment, here are a few points to keep in mind:

• Prices aren’t crashing, but they’re no longer spiraling upward. That makes entering the market less risky.

• Rates are volatile, but trending down. Locking in a slightly lower rate today can make a meaningful difference in monthly costs.

• Local markets vary. National averages are useful, but your local real estate professional can help you understand conditions where you want to buy.

Why Timing Still Matters

If you’re considering a move, it’s worth noting that the current environment may represent a sweet spot. Prices are growing at a moderate pace, rates are lower than they’ve been in months, and competition has eased compared to the frenzied days of the pandemic housing boom.

At the same time, waiting too long could mean missing opportunities. If rates fall further, more buyers may re-enter the market, creating additional competition. Similarly, if inventory remains limited, prices could pick up again in certain areas.

The key takeaway? Staying informed and working with a trusted agent can help you make the most of the market as it stands today.

The Bottom Line

Affordability has been the top concern for homebuyers in recent years, and for good reason. But the latest data suggests the market is beginning to shift in ways that favor buyers.

• Prices are moderating. Gone are the days of 20% annual increases. Today’s slower growth makes planning and budgeting more realistic.

• Mortgage rates are easing. While still higher than historic lows, they’ve pulled back from their recent peaks, reducing monthly payment pressures.

Together, these changes could create the opening many buyers have been waiting for.

If you’ve been considering a move, now is the time to re-engage. Connect with a local real estate agent who can break down what’s happening in your specific area and help you create a strategy that fits your goals.

Because while affordability challenges aren’t completely solved, the housing market is shifting—and for buyers, those shifts might just be the green light you’ve been hoping for.