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Good News for Buyers: Home Affordability Improving in 2026
If you’ve felt priced out of the market or stuck waiting on the sidelines, there’s finally some encouraging news:
Buying a home is finally becoming more affordable.
Monthly payments have started to come down thanks lower interest rates, and buyers are starting to feel pricing pressures ease. That doesn’t mean homeownership is suddenly easy for everyone, but after a tough stretch, small improvements are meaningful.
Home Affordability Is Finally Improving
One of the clearest ways to track this change is to look at how much of a household’s income goes toward owning a home.
According to Zillow, housing is typically considered affordable when total housing costs take 30% or less of your monthly income. That includes your mortgage payment, property taxes, insurance, and basic maintenance.
For the past few years, many buyers were well above that mark, which pushed homeownership out of reach for a lot of households. But that’s starting to shift. Zillow research shows it’s taking less of a typical household’s income to buy a home than it did just a few years ago (see graph below):
We’re not all the way back to Zillow’s 30% threshold yet, so affordability is still tight in many markets. But the trend is improving, and that’s a big change from what buyers have been up against.
Why Homebuying Is Becoming More Affordable
Mortgage rates get most of the attention, and yes, rate movement plays a major role in monthly payment size. But it’s not the only reason affordability is improving. Three key trends are working in buyers’ favor right now:
1) Mortgage rates have eased
Rates are near their lowest level in more than three years, which can reduce monthly payments and expand buying power (see graph below):
2) Home price growth has cooled
Home prices aren’t falling nationally, but they’re rising more slowly than they were a few years ago. That matters because slower price growth helps keep purchase prices from jumping as sharply, which can make payments feel more manageable and the overall buying process more predictable.
3) Wages are growing faster than home prices
This is a major factor that often gets overlooked. When incomes rise faster than home prices, buyers can start catching up. Mark Fleming, Chief Economist at First American, explains:
“When income growth exceeds house price growth, house-buying power improves—even if mortgage rates don’t decline meaningfully.”
None of this makes homes “cheap,” but it does help explain why the math is starting to work a bit better than it did even a year ago. In short, some of the forces that curbed affordability are finally easing. As Fleming again explains:
“Affordability remains challenging, but for the first time in several years, the underlying forces are finally aligned toward gradual improvement. Mortgage rates may drift down only slowly, but income growth exceeding house price appreciation will provide a boost to house-buying power — even in a higher-rate world. Affordability won’t snap back overnight, but like a ship finally catching a steady tailwind, it’s now sailing in the right direction.”
Because of these combined shifts, many economists expect affordability to continue improving in 2026.
Where Are Homes Becoming Affordable First?
So how much will affordability improve, and where will it show up first? In some places, the difference could be noticeable. Zillow says some markets are expected to fall back under their affordability threshold (30% of income or less) by the end of the year (see graph below):
But you don’t have to live in one of those specific markets, and you may not have to wait until year-end to see improvement. Many areas are already trending in a better direction.
That’s why your next best step is local: talk to a real estate agent who understands what’s happening in your market. The national headlines don’t always reflect what’s going on neighborhood by neighborhood, and you might be closer to buying than you think.
Conclusion
For the first time in a while, home affordability is easing, and that’s an important shift for buyers.
And because the pace of improvement varies by location, understanding what’s changing locally can make all the difference. If you want to see how these trends are playing out where you live, connect with a local real estate agent to talk through your options.
Mortgage Rates Just Hit a 3-Year Low. Does It Matter in 2026?
If you’ve been watching mortgage rates and waiting for a “better time” to buy, here’s your chance. Rates just dipped below 6% for the first time in more than three years. Even modest rate movement can change what you can afford, how competitive you can be, and whether buying feels realistic again, especially if last year’s higher rates pushed you to the sidelines.
With rates finally easing up into 2026, here’s a fresh take on why lower mortgage rates are still a big deal, plus what to do next if you’re thinking about making a move.
Why Mortgage Rates Impact More Than Just Interest
A mortgage rate isn’t just a number on a lender’s website. It shapes the entire homebuying experience because it affects:
- Your monthly payment
- How much home you can qualify for
- Your comfort level with your budget
- How competitive your offer can be
When rates jump, affordability tightens fast. That’s why many buyers (especially first-time homebuyers) feel the pinch first. When rates ease, the reverse happens: budgets get a little more breathing room, and choices open up.
The “One-Point” Difference That Changes the Math
One of the easiest ways to understand why rate declines matter is to look at a simple example.
When rates are closer to 7%, monthly payments rise sharply. When rates move closer to 6% (or below), payments can drop meaningfully. On a typical loan amount, that can translate into hundreds of dollars per month in savings compared to the higher-rate environment.
That difference can help you:
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Stretch your budget without stretching your lifestyle
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Consider more homes in a neighborhood you actually want
-
Keep cash available for repairs, furnishing, or future goals
In practical terms, the change isn’t just “cheaper interest.” It can be the difference between compromising on your wish list and finding a home that fits.
What Lower Rates Can Unlock for Buyers
When borrowing costs come down, three things usually happen for homebuyers:
1) Lower monthly payments
A lower rate can reduce the monthly principal-and-interest payment, which helps many buyers feel more confident about moving forward.
2) More buying power
When the payment drops, you may qualify for more home at the same monthly budget. That can mean a better location, an extra bedroom, or a property that needs fewer updates.
3) Stronger offers without overextending
More budget flexibility can help you compete without taking on a payment that makes you uncomfortable. That matters in markets where inventory is still tight and desirable homes move quickly.
Why This Can Bring More Buyers Off the Sidelines
Rate changes don’t only affect you. They affect everyone who has been waiting, too.
Industry research suggests that when rates sit around certain thresholds, millions more households can afford a median-priced home. In fact, research from the National Association of Realtors (NAR) points to 5.5 million additional households being able to afford the median-priced home when rates are at 6% or below, and it estimates roughly 550,000 of those households could buy within the next 12 to 18 months.
That matters because it signals something important: pent-up demand can return quickly when affordability improves.
If you’re home-searching now (or preparing to), you may be able to act before competition fully ramps back up.
A Quick Reality Check: Rates Aren’t the Only Factor
Lower rates help, but they don’t magically make every home affordable. Your true monthly cost depends on several moving pieces, including:
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Home price
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Local inventory and competition
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Property taxes
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Homeowners insurance (which can vary widely by state and ZIP code)
-
HOA dues
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Your down payment and credit profile
That’s why the smartest next step isn’t guessing. It’s running real numbers to figure out what “affordable” looks like for you.
What To Do Next If You’re Considering Buying
If you’ve been waiting for rates to improve, here’s a simple, practical plan:
-
Get pre-approved (not just pre-qualified).
Pre-approval gives you a clearer budget and shows sellers you’re serious. -
Calculate your comfortable payment range.
Decide what fits your life, not just what a lender says you can qualify for. -
Compare scenarios with your lender.
Ask for payment examples at different price points, down payments, and rate options. -
Watch inventory in your target neighborhoods.
The best “deal” is the home that works for your needs and your budget.
Conclusion
Mortgage rates easing from last year’s highs isn’t just an attractive headline. For many buyers, it can be the shift that turns “maybe someday” into “this could actually work.”
If you paused your search when rates were higher, it’s worth revisiting your numbers now. A quick conversation with a trusted lender can show what today’s rate environment means for your payment, your buying power, and your options.
If you’re thinking of buying, or need help finding a lender, reach out to us today. We can connect you with local agents and lenders to make your journey as simple as possible.
Expert Forecasts Point to Home Affordability Improving in 2026
If the last few years have felt like a constant tug-of-war between home prices, mortgage rates, and “Can we actually afford this?”, you’re not alone. Affordability has been the biggest obstacle for buyers (and a major source of hesitation for sellers), but the outlook for 2026 is more encouraging than what we’ve seen in a while.
In fact, affordability improved meaningfully in 2025, and many industry forecasts expect that progress to continue through 2026. The reason comes down to three forces shaping the market: mortgage rates, housing inventory, and home price growth.
1) Mortgage Rates: Lower Than the Peak, Likely Steadier in 2026
Mortgage rates have already eased from recent highs by nearly a full percentage point over the past year in some measures, and that matters more than most people realize. Even small rate shifts can change monthly payments, buying power, and which homes feel like realistic options.
What experts expect
Forecasts suggest rates may hover in the low 6% range through 2026, though the exact path depends on the broader economy, the job market, and Federal Reserve policy decisions. The key takeaway: rates are already lower than they were a year ago, which helps restore some breathing room for people planning a move in 2026.
What this means for buyers
- Lower rates can reduce monthly payments
- Improved buying power can make more listings qualify as “within reach”
- You may have more flexibility to negotiate when combined with rising inventory
What this means for sellers
- The market is adjusting to the idea that “rates in the 6s” may be the new normal
- If you need to move, it may be more feasible than it looks, especially if you’re sitting on substantial equity
Experts expect mortgage rates to hover in the low 6s or drop even lower as the economy changes in 2026.
2) Housing Inventory: More Homes for Sale, More Leverage for Buyers
One of the biggest changes in 2025 was inventory finally moving in the right direction. With more homes available, buyers got something they haven’t had in years: options—plus more time to compare those options and negotiate.
Inventory is still expected to grow
After a meaningful rise of about 15% in 2025, forecasts call for continued growth in the supply of homes for sale in 2026 (though likely at a slower pace than the last big jump). Realtor.com economists, for example, project additional gains of about 8.9% in active listings this year.
What this means for buyers
- More choices (and fewer “take it or leave it” situations)
- Greater negotiating power—especially on homes that are priced too aggressively or need updates
What this means for sellers
- Pricing strategy becomes critical. In a market with more options, buyers compare everything.
- Strong presentation (clean, staged, repaired) matters more when competition increases
3) Home Prices: Still Rising Nationally, But at a More Sustainable Pace
Here’s what many headlines miss: increasing inventory tends to reduce upward pressure on prices, but it doesn’t automatically mean prices crash. Most national forecasts expect home prices to keep rising in 2026, just more slowly than the rapid spikes of the recent past. On average, experts predict home price growth of about 1.6% in 2026.
Why slower growth can be good news
More moderate appreciation helps buyers plan and budget with fewer surprises, while still supporting overall market stability.
But location is everything. Some areas may outperform the national average, while others could see flat or slightly declining prices depending on local supply, demand, and employment conditions. If you’re serious about a move, a local real estate agent can help you interpret what’s happening in your neighborhood, not just what’s happening nationally.
Home prices are expected to continue rising in 2026, though at a more moderate rate.
Will More Homes Sell in 2026?
When rates are lower than recent peaks, inventory is improving, and price growth is calmer, you get a healthier affordability equation. That’s why many experts expect more home sales in 2026, as both buyers and sellers find conditions easier to navigate.
As Zillow’s Chief Economist Mischa Fisher notes:
“Buyers are benefiting from more inventory and improved affordability, while sellers are seeing price stability and more consistent demand. Each group should have a bit more breathing room in 2026.”
Increased affordability in 2026 has experts predicting higher home sales over the past two years.
2026 Could Feel More Balanced Than You’ve Seen in Years
Affordability won’t change overnight. But if current forecasts hold, 2026 is shaping up to be a year with:
- More balance between buyers and sellers
- More predictability in pricing
- More flexibility in negotiations
- More opportunity for people who’ve been waiting on the sidelines
If you’re thinking about buying or selling in 2026, the smartest next step is to get hyper-local: understand neighborhood pricing trends, inventory levels, and what buyers are actually paying (and negotiating) right now.
Ready to start but aren’t sure how? Reach out to us today to connect with an expert agent for all the latest info on your local market.
Renting vs. Buying: Which Home Option Is Right for You?
Between stubborn mortgage rates and rising home prices, you’ve probably mulled over renting vs. buying a home. In market conditions like these, renting and waiting to buy can feel like your only realistic option. This can be the truth in many cases, and buying before you’re ready can be a costly mistake.
But the short-term savings of renting can sometimes trap you in a cycle, preventing you from making wealth-building investments. Over time, this can actually end up costing you more than buying a home early and slowly building equity. Unsurprisingly, a recent survey from Bank of America found that 70% of prospective homebuyers feel renting could hinder their financial future.
Ultimately, the pros and cons of renting and buying come down to your own short-term and long-term financial goals. If you’re feeling torn over whether you should nest or invest, take these major differences into account to decide.
Homeownership Builds Your Wealth Over Time
Apart from giving you your own place to live, homeownership grants the important bonus of building your wealth over time. This is because home prices usually rise as time goes on, meaning waiting longer to buy costs you more. This isn’t always true of every housing market, but the general national trend tends to speak for itself.
The average home sale price has more than tripled in the past 30 years.
Even better, your home equity also grows over time when you’re a homeowner. Equity is the difference between what your home is worth and what you still owe on your mortgage. Your equity grows with each mortgage payment you make, and this builds your net worth over time.
According to the Federal Reserve, the average homeowner’s net worth is nearly 40 times greater than that of a renter. That’s a life-changing difference, and seeing it represented visually really drives the point home.
The average net worth of a homeowner household is almost 40X greater than that of a renter household.
This massive difference in personal wealth is just one of the reasons that Forbes says:
“While renting might seem like [the] less stressful option . . . owning a home is still a cornerstone of the American dream and a proven strategy for building long-term wealth.”
Renting Helps You Save in the Short Term
Compared to homeownership, renting offers lower monthly payments and the freedoms of relatively negligible commitment and responsibility. This often makes renting feel like the safer option, and it usually is, at least in the short term. But in the long term, renting can land you in a trap that prevents you from building real wealth.
Rent tends to rise along with home prices, and this has been true for decades. Rental costs have been somewhat stable recently, but they almost never trend downward. This trap of paying increasing rent without building wealth can make buying a home feel impossible.
Like home prices, rental costs have risen dramatically in the past several years.
Financial uncertainty like this can have a real, lasting impact on any of your financial decisions. In the same Bank of America survey, 72% of potential buyers said they worry rising rent could affect their current and long-term finances.
Rent money doesn’t come back to you, and that means it doesn’t grow your wealth. The only mortgage it’s paying is your landlord’s.
So, whether you’re renting or owning, you’re paying off a mortgage. The question is: whose mortgage do you want to pay?
Renting vs. Buying: What Really Matters
Here’s another way to look at renting vs. buying. Rent money is gone once you pay it. Payments toward your own house build equity, like a savings account you can live in. Obviously, buying comes with higher upfront costs and more long-term responsibility. But the reward is a stable investment that grows over time. And while buying a home often feels out of reach, a solid plan can get you there.
As Realtor.com Senior Economist Joel Berner explains:
“Households working on their budget will find it much easier to continue to rent than to go through the expenses of homeownership. However, they need to consider the equity and generational wealth they can build up by owning a home that they can’t by renting it. In the long run, buying a home may be a better investment even if the short-run costs seem prohibitive.”
Conclusion
Renting may be cheaper in the short term, but it can cost you more over time without building your wealth. If you’re weighing the pros and cons of renting vs. buying, consider your long-term financial goals. Short-term saving can trap you in an endless cycle of renting, but buying without planning can be financially overwhelming.
If you’re ready to make the leap from renting into buying a home, contact us today. We’d be happy to connect you with a local agent who can make your dreams a reality.
How Could a Recession in 2025 Affect the Housing Market?
As talk about economic slowdowns runs wild, worries about a potential recession in 2025 are on the rise. Naturally, many homeowners are wondering what a recession could do to the value of their home, and their buying power.
Using historical data from recessions of decades past, let’s see how a recession might affect the housing market in 2025.
A Recession Won’t Lower Home Prices
It’s a common misconception that a recession will cause home prices to crash, like they did in 2008. In reality, 2008 was the only time the housing market saw such an extreme, dramatic drop in prices. Overflowing home inventory caused that price crash, and conversely, low inventory has prevented a similar crash in the years since.
Even in markets where housing inventory is up, it’s still far below the listing oversupply that caused the 2008 crash. Indeed, according to data from Cotality, home prices actually increased during four of the last six major recessions.
As the graph shows, a recession doesn’t necessarily mean that home prices will crash, or even drop. In reality, historical data shows that home prices usually continue along their current trajectory when a recession hits. And at the moment, home prices are still rising nationally, but at a more normalized rate. So, as the market stands now, a recession in 2025 would most likely drive prices even higher.
Mortgage Rates Typically Decline During Recessions
Home prices may stay their path during economic slowdowns, but mortgage rates actually tend to drop. Looking again at historical data from the last six recessions, this time from Freddie Mac, mortgage rates fell each time.
Historically speaking, a recession could mean that mortgage rates may even decline this year. However, the last time a recession dramatically lowered mortgage rates was over three decades ago in 1991. So with that said, even if a recession does happen, don’t expect a game-changing drop in mortgage rates.
Conclusion
Nobody ever truly knows what the economy will do, but the odds of a recession in 2025 have increased. Still, a recession doesn’t mean you need to worry about the housing market or the value of your home. The historical data tells us that a recession may even drive home prices higher and mortgage rates lower.
Wondering how an economic slowdown could impact your local market? Connect with us to get the info you need to plan ahead.
Should You Buy a Home This Spring or Wait for Lower Prices?
You’re probably familiar with the saying “The best time to plant a tree was yesterday, but the next best time is today.” It’s a valuable lesson about future planning and investment that, surprisingly, applies to the decision to buy a home too.
Even though buying a home is a major financial expense, it’s also a major investment that grows over time. As the price of your home increases over time, the value of the equity you’ve built grows with it. And while waiting for prices to drop may be an attractive option, trying to time the market rarely works.
But here’s something to consider: the longer you wait to buy a home, the more your patience could cost you. Let’s explain why.
Home Prices Are Expected To Continue Climbing
Each quarter, over 100 housing market experts respond to Fannie Mae‘s Home Price Expectations Survey (HPES). Consistently, the survey results show experts agreeing that home prices will continue to rise through 2029 or even longer.
Sharp price increases may be behind us, but experts predict steadier, healthier increases of 3-4% per year moving forward. This rate of increase will vary by market from year to year, but it’s much closer to normal. Reliable growth is a promising sign for hopeful buyers, and the housing market at large, as the graph below demonstrates.
Even in markets experiencing slower price growth or short-term decreases, the steady gains of homeownership eventually win in time. After all, a growing, long-term financial investment will always beat a one-time discount.
Here are the main points to remember:
- Home prices will be higher next year. Experts don’t expect home prices to fall any time soon, at least at the national level.
- Waiting for a perfect mortgage rate or price drops is a gamble. With only slight dips in mortgage rates expected in the near future, price increase could outpace any potential mortgage savings. Unless home price growth is slow or mortgage rates are low in your area, waiting will likely be more expensive.
- Buying early means building more equity. When you invest in homeownership early, your equity and appreciating home value reward you in the long run.
The Costs of Waiting To Buy
To demonstrate how these theories play out in real-world numbers, here’s a typical example. If you were to buy a $400,000 house in 2025, it could gain almost $80,000 in value by 2030. The graph below demonstrates how this value appreciates year by year based on the expert data we mentioned earlier.
This can be a considerable difference in your future wealth and why buyers who invest early are often glad they did. When it comes to building wealth through long-term investment, time in the market matters.
The question to consider isn’t “Should I wait to buy?” It’s really “Can I afford to buy now?” Just like planting a tree, making short-term sacrifices to buy a home will eventually pay off in the long-term.
Between rising prices and stubborn mortgage rates, today’s housing market is challenging, but achieving homeownership is far from impossible. Exploring different neighborhoods, seeking alternative financing options, or applying for down payment assistance programs can all make a critical difference.
What’s most important is acting decisively when you’re able to, instead of waiting for a perfect opportunity that never comes.
Conclusion
If you’re interested in buying but still undecided, take the time you need to make the right choice. But, remember that realizing an investment takes time, and the sooner you make one, the sooner you’ll be rewarded.
If you’re curious about what’s happening with prices in our local area, then reach out to us. Even if you’re not ready to buy, an expert local agent can fill you in with the info you need.
Many Fear a Housing Market Crash in 2025 – Will It Happen?
Between every economic uncertainty underpinning this year so far, Americans are understandably trepid about the future. Amid market lows and rising prices, many are asking if we’re heading for a housing market crash in 2025.
If talk of tariffs and mercurial markets are giving you pause about your plans, you’re not alone. In fact, new data from Clever Real Estate has found that 70% of Americans are worried about a housing crash in 2025. But how likely is this, and what does the latest data say?
Low Inventory Prevents a Crash in Prices
Before you put your plans to buy or a sell a home on hold, let’s look at the facts. The reality is that the trends in the housing market we’re seeing aren’t signs of crashing, only of shifting. As Chief Economist at First American Mark Fleming explains:
“There’s just generally not enough supply. There are more people than housing inventory. It’s Econ 101.”
Consider the basic laws of supply and demand. If the supply of something is low, its prices are bound to go up, and homes are no exception. And even though housing inventory is up in 2025, high demand from buyers is still driving home prices higher.
According to recent data from Realtor.com, the number of homes for sale in 2025 is climbing, but still below normal levels. Even still, home supply is at its highest since pre-pandemic levels, showing a positive trend in the right direction.
That ongoing low supply is what’s stopping home prices from dropping at the national level. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), says:
“… if there’s a shortage, prices simply cannot crash.”
Home Prices Normalize as Inventory Increases
As more homes are listed on the market, upward pressure on home price growth normalizes. Prices may not be falling, but they’re rising at a rate closer to what we’d consider normal for the market.
Even though prices aren’t declining nationally, increased inventory means they’re rising more slowly than they were. The trend we’re currently seeing is what’s considered price moderation.
The good news for buyers is that this price moderation is expected to continue throughout the rest of the year, according to a January report from Freddie Mac:
“In 2025, we expect the pace of house price appreciation to moderate from the levels seen in 2024, while still maintaining a positive trajectory.”
This means that home prices will continue rising in most markets, but not as quickly as they did in 2024. This is great news for anyone who’s been priced out of the market thanks to rapid price appreciation these past few years.
These numbers represent national trends, so the true story will vary in individual markets. A local real estate agent can give you the latest details on the market trends in your your own unique area.
Conclusion
Fears of a housing market crash in 2025 abound, but don’t let this worry you. While a little caution is healthy, experts are confident that a housing market crash is unlikely in 2025. As a recent report from Business Insider says:
“. . . economists who study housing market conditions generally do not expect a crash in 2025 or beyond unless the economic outlook changes.”
In reality, this year’s housing market is stabilizing thanks to decreasing price growth and increasing home supply. If you’re curious about the market trends in your local area, contact us today to connect with an agent who can reassure you with the facts.
It’s Tax Day – Here’s How a Refund Can Help You Save For a Home
If you’ve been planning to buy a house, you know how hard it can be to save for a home. What you might not know is that your tax return can be a helpful boost to your savings and budget. According to a recent post by Freddie Mac:
“ . . . your tax refund from the IRS can be a useful supplement to your homebuying budget.”
So if you’re planning to get a tax refund this year, consider the difference that extra funding can make. A refund can help you pay for the upfront costs of homebuying, like a down payment or closing costs. And, according to the IRS, your tax refund may even help you out this year more than ever.
How a Tax Return Can Help You Buy a Home in 2025
Recent data from the Internal Revenue Service (IRS) has found that the average individual’s refund is 3.9% higher this year. And while that’s not a huge increase, it can make a big difference if you’ve been struggling to save. The graphic below visualizes the new IRS data, comparing the average tax return in March 2024 to March 2025.
Your own personal tax refund will likely vary, but any financial boost helps when you’re saving for a home. According to Freddie Mac, the following are several ways you can put your tax return to good use when homebuying:
- Saving for a down payment – A down payment on a home is often one of the biggest obstacles to homeownership that buyers face. Saving your tax refund for a down payment can be a smart way to make this major step easier. Keep in mind while a 20% down payment may be common, it’s not typically a hard requirement to buy.
- Paying for closing costs – Usually due at closing, closing costs include fees for services like the appraisal, title insurance, and underwriting of your loan. While these vary by state, they’re often between 2% and 6% of your home’s total final purchase price. As a much lower percentage of your home’s price, closing costs can be a great use of your yearly refund..
- Lowering your mortgage rate – Lenders sometimes give buyers the option to buy down their mortgage rate if they qualify. This allows buyers to pay an upfront fee to lower their initial mortgage rate, reducing monthly payments in the short-term. This option can be particularly helpful if interest rates and mortgage payments are a major homebuying hurdle you’re facing..
Financially speaking, this may be more complicated in practice, but there’s no need to do it all on your own. Working with an experienced, trustworthy real estate professional can simplify your financial planning, helping you reach the best decision possible. An agent who understands the homebuying process, your unique financial needs, and your personal goals can make all the difference.
Conclusion
If you’ve been saving for a home, you already know well that every penny counts. Your tax return probably won’t be the final financial boost you need, but there are ways to use it effectively. Planning and identifying how to best spend that money can give you a real, meaningful step toward buying your home.
Are you eager to buy a home but having trouble making things work? Contact us today. We can connect you with local lenders and agents to help make your dream of homeownership a reality.
Selling Your Home? Avoid This Mistake When Setting Your Asking Price
When selling your house, the typical goal is to sell quickly at the best price possible. Naturally, ever since home prices took off around 5 years ago, most sellers have been aiming high. But housing inventory is making a comeback, and some sellers haven’t considered what this shift means for their asking price. As a result, buyers are becoming choosier, and price cuts on overpriced listings are increasing alongside home supply.
According to February 2025 data from Realtor.com, home price cuts this February reached their highest number since 2019. That’s the highest number of price cuts in 6 years, and a real return to pre-pandemic market levels.
Given that 2019 is considered the housing market’s last normal year, this demonstrates a major, substantial shift. The market is finally starting to normalize, and may quickly break out of the post-pandemic slump it’s been stuck in.
However, this is a distinctly different trend from the hot seller’s market of 2021 and should be treated differently. You may not sell your house for top dollar like you would have at the pandemic’s peak, but that’s okay. By setting a smart asking price and tempering your expectations, you can still sell quickly, and at a great price.
You may be planning to price your listing high and cut it later if necessary, but this has its drawbacks. Pricing too high and lowering later means you may actually end up with lower offers in the end. Pricing right the first time is the best way to avoid this, and a local agent can make the difference.
How a Local Agent Can Find Your Perfect Asking Price
A true expert real estate agent doesn’t set an asking price without good reason. These agents consider real data and trends unique to your market, setting a price specific to your home. This way, you set a realistic price based on your home’s true value to attract as many buyers as possible.
Depending on your local market and your agent’s analysis, they may even recommend strategically pricing slightly below market value. While this may sound counterintuitive, it can be a strategic move to attract more attention to your listing, earning you more competitive offers. Here are a few ways a local agent will determine the best price for your listing:
- Researching recent home sales. What price did homes similar to yours finally sell for? Were these homes initially listed higher before dropping in price to sell?
- Analyzing local market trends. The true value of your home isn’t based on the price you’d like to sell it at. It’s the price that potential buyers are willing to pay. A local agent will have a strong idea of this number based on experience.
- Strategizing to sell. A great agent will price your home to attract attention, creating a sense of urgency among buyers and increasing demand.
How Overpricing Your Home Can Backfire
Unfortunately, some sellers still ignore their agent’s advice and prefer to start high just to see what happens. The hope being maybe they get their full asking price, or they at least have more wiggle room for negotiation. But pricing high usually ends up costing you, and here’s why:
- Buyers may ignore it. The market’s past few years – and the direction it’s headed – have made buyers more budget-conscious than ever. If a home listing looks overpriced, buyers are more likely to ignore it and move on than consider negotiating.
- It could stay on the market too long. The longer your home sits on the market without selling, the more buyers will assume something is wrong with it. This can make it harder and harder to sell as time goes on, and makes a price cut almost inevitable.
- You may sell for less in the end. Price cuts often lower a listing’s final selling price below its best, most realistic market value. Listing at the right price to begin with gives sellers the best chance of selling quickly at a great price.
The graph below demonstrates how these factors play out in the market. Using data from the National Association of Realtors (NAR), it shows how time on the market lowers final selling price.
According to the data, if a house sells within its first 4 weeks after listing, it usually sells for full price. Homes that are priced at or just below current market value typically sell quickly in this same window. When a home is priced right, it attracts truly interested buyers who are willing to buy at your asking price. In a hot market, buyers may even compete with other buyers, or even make an offer above your listing price.
On the other hand, a home that’s overpriced will take longer to sell, if it sells at all. As the graph demonstrates, after that first 4 weeks on the market, final selling price starts to drop. And as buyer interest declines over time, the more likely a seller will accept a low offer, or cut their price.
Conclusion
The housing market is normalizing thanks to increasing housing inventory, causing price cuts to rise with increasing buyer power. For sellers, setting the right asking price is more important than ever, and overpricing could make your listing sit on the market. Advice from a local agent can help you avoid this mistake and sell quickly without having to lower your price.
Interested in selling but need help pricing your home for your local market? Get in touch with us today. We can connect you with a local agent who can sell your home at the best price possible.
What’s Your Real Home Value in the 2025 Market?
If you’ve checked home prices in the past few years, you know too well that they’re always rising. But if you’re a current homeowner, have you considered what this might mean for your own home value? It may be that your home is worth far more than you think in 2025.
While rising prices are expected, the home value increases of the post-Pandemic housing market have been dramatic. And if you’re a seller waiting to list, this could mean a huge payoff when you finally close. If you’re eager to know much your own house could sell for, finding out is easier than you think.
The Post-Pandemic Home Value Launch
Home prices typically rise around 2-5% per year, but in 2021-2022 that number rose to double-digit levels. In the spring of 2022, year-over-year percentage growth finally peaked at over 20% nationally. The sheer number of buyers in the market during this time sent home prices soaring as housing supply lagged. And though price growth has settled since then, the home value accrued by homeowners in that time remains.
The lingering effects of that volatile period have caused difficulties for buyers, but they’ve also produced great opportunities for sellers. There’s a good chance your house has gained tremendous value since then, and that means more wealth for you.
The map below references data from the Federal Housing Finance Agency (FHFA) to illustrate that home prices have risen by nearly 60% in just the past 5 years alone nationally. The most extreme increases have taken place in states marked with a darker blue, like Maine, New Hampshire, and Florida.
If worries about today’s rates and prices have stopped you from selling your home, let these numbers reassure you. Your home’s risen value may be exactly what you need to close the affordability gap and purchase your next house.
Even better, if you’ve owned your home for 10 years or more, your value is likely even higher. You can stack the incredible gains of the past five years on top of five years of healthy appreciation too. And an agent can help you figure out what that really looks like.
How To Find Out What Your House Is Really Worth
Percentages will help you ballpark an estimate, but you need specific numbers to make real, actionable decisions. To help, you can get a free home valuation estimate from us right now using the tool below. You can even sign up for a full valuation report.
Home valuations can be great tools, but only a local real estate agent can give you the best, most accurate look at your house’s real market value. An agent will know the state of your local housing market and the factors driving it. They can provide insights about current housing inventory, pricing of comparable homes, and unique contributors to value like renovations.
By knowing what’s happening where you live, an agent can stack their market knowledge against the unique condition and features of your home and give you an accurate estimate of your home’s current value in your area.
Conclusion
Home values have taken off in just the past few years, and that’s great news for current homeowners. Knowing what your house is worth in today’s real estate market will help you plan your next move. A local agent can give you a great idea of how much your home might realistically sell for.
If you’re a homeowner considering a move, get your free home valuation from us at Century 21 Affiliated now. Ready to sell? Reach out now and we’ll connect you with a local expert real estate agent who can get your house sold.
