Trustpilot
Loading...
Loading...Loading...
I was just in my Master’s of Social Work (MSW) class learning about how major life transitions affect families emotionally, and it struck me how buying or selling a home sits right at that intersection of financial stress and life-changing decisions. The housing market doesn't exist in a vacuum—it directly impacts whether families can afford stability, whether first-time buyers can enter the market at all, and whether people can make moves that improve their quality of life.
Simply put, the real estate market shifts constantly based on a push-and-pull between how many homes are available and how many people want to buy them. When conditions favor buyers, we call it a buyer's market. When sellers hold the cards, it's a seller's market. Understanding which market you're in—and more importantly, which market exists in your specific area right now—can literally save you tens of thousands of dollars or prevent you from making costly timing mistakes.
The data tells us something striking is happening right now. According to the National Association of REALTORS®' 2025 Profile of Home Buyers and Sellers covering transactions between July 2024 and June 2025, first-time home buyers represent just 21% of the market, the lowest share since NAR began tracking this metric in 1981. Meanwhile, all-cash buyers have reached a record 26% of purchases. What this means for you is that the housing market has fundamentally changed from the one our parents navigated.
Think of it like this: a buyer's market is when you walk into a store and find the shelves overflowing with exactly what you want, multiple versions to choose from, and sales associates eager to make a deal. In real estate terms, a buyer's market exists when the supply of available homes exceeds the number of people actively looking to purchase. This imbalance shifts negotiating power directly into buyers' hands.
Here's the human side of this: in a buyer's market, you can actually breathe. You're not racing three other families to put in an offer before sunset. You can schedule a second showing without worrying the house will be under contract before you return. You have time to think about whether that kitchen layout really works for your family, whether you're willing to take on those repairs, and whether the neighborhood feels right when you drive through it on a Tuesday evening.
According to Bankrate's 2025 housing market analysis, inventory levels nationally reached a 4.6-month supply as of May 2025, up from 3.8 months one year prior. While this represents improvement, anything below six months of supply typically still favors sellers, showing we're transitioning toward balance rather than firmly in buyer territory nationally. However, housing economists analyzing September 2025 data found that buyer advantages have emerged in multiple major metropolitan areas as inventory continues growing.
In a buyer's market, housing prices tend to decrease or at minimum stabilize rather than climbing rapidly. Homes remain on the market for extended periods—sometimes weeks or months longer than in competitive conditions. This reality forces sellers to compete with each other by pricing competitively, making concessions on repairs, offering to pay closing costs, or providing other incentives to attract the shrinking pool of buyers.
Several economic and market forces can tip the scales toward buyers:
Struggling employment conditions. When the job market weakens and unemployment rises, fewer people have the income stability and confidence to take on a mortgage. Job security becomes paramount, and major purchases like homes get postponed. Potential buyers either can't qualify for financing or choose to wait until their employment situation stabilizes.
Economic recession or downturn. Broader economic contractions reduce both the number of buyers in the market and can force existing homeowners to sell, increasing inventory. Recessions typically bring uncertainty that makes people hesitant to make major financial commitments. Consumer confidence drops, lending standards tighten, and home purchases decline.
Increased residential development. When builders ramp up new construction and inventory expands faster than population growth, competition intensifies among sellers—both builders marketing new homes and existing homeowners trying to sell. This surge in available properties gives buyers more options and therefore more leverage. According to J.P. Morgan's U.S. housing market outlook, new homes for sale reached 481,000 units, the highest level since 2007, with speculative homes at 385,000, the highest since 2008.
Interest rate changes. This one's interesting because rate impacts work both directions. When mortgage rates drop significantly, borrowing becomes more affordable, which actually draws more buyers into the market and can reduce buyer advantages. However, if rates rise dramatically as they did in 2022-2023, many potential buyers get priced out entirely, reducing competition and eventually shifting power back toward buyers as inventory accumulates.
Timing markets is notoriously difficult if not impossible. Whether your local market tilts toward buyers depends on both national economic trends and hyperlocal factors in your specific community.
National inventory data provides some encouraging signals. According to Realtor.com data analyzed in November 2025, 17 states had more active housing inventory at the end of October 2025 than they did in pre-pandemic October 2019. These states include Alabama, Arkansas, Arizona, Colorado, Florida, Georgia, Hawaii, Idaho, Nebraska, Nevada, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Utah, and Wyoming. Nationally, active listings were up 15% year-over-year from October 2024 to October 2025.
However, here's what this means for you: even with improving inventory trends, many markets—particularly in the Midwest and Northeast—still remain tight. According to Altos Research's analysis of 2025 housing trends, while national inventory has grown 27% compared to last year, it remains 22% below end-of-2018 levels. The firm projects that by the end of 2026, inventory should return to pre-pandemic norms assuming current growth continues.
The reality nobody tells you is that waiting for the "perfect" market conditions can sometimes cost more than buying in less-than-ideal circumstances. At AmeriSave, we encourage clients to focus on their personal financial readiness and local market conditions rather than trying to time national trends. Building strong credit, saving for a down payment, and understanding your true budget puts you in position to act when the right opportunity appears, regardless of whether economists label your market as buyer-friendly or not.
A seller's market flips the dynamic completely. This is when demand for homes significantly outpaces the available supply, creating intense competition among buyers. In my work with home buyers over the years, I've seen this create real emotional distress—families losing out on home after home, writing heartfelt letters to sellers, waiving inspection contingencies they really shouldn't waive, and generally feeling powerless in a process that's supposed to be exciting.
In seller's market conditions, homes sell rapidly, often receiving multiple offers within days or even hours of listing. Buyers find themselves with limited choices and face pressure to act quickly without the luxury of careful consideration. As a result, buyers frequently pay above asking price, accept properties in as-is condition, and compete by offering the most favorable terms possible to sellers.
This often leads to bidding wars where competing buyers drive prices well beyond the original listing price. Sellers gain leverage to be selective about offers, reject contingencies, dictate closing timelines, and generally control the transaction terms. What this means for you as a buyer in these conditions is that your negotiating power evaporates. You're essentially hoping the seller chooses your offer from the stack on their kitchen table.
Strong employment and economic growth. When job markets thrive and unemployment stays low, more people feel financially secure enough to buy homes. Rising wages and job stability give potential buyers both the confidence and qualification ability to take on mortgages. More qualified buyers chasing the same inventory creates competition that pushes prices upward.
Population growth and migration patterns. When more people move into an area than move out, housing demand increases without a corresponding instant increase in supply. According to housing market analysis from late 2024, many areas that saw major price surges during the pandemic housing boom—particularly Sunbelt locations like Tampa and Austin—faced challenges as pandemic-driven migration slowed and local incomes couldn't support the elevated prices. However, during the migration surge itself, these markets were extremely seller-favorable.
Low mortgage interest rates. When borrowing costs drop, monthly payments become more affordable even at higher purchase prices, enabling more people to qualify for mortgages and enter the market. This increased buyer pool intensifies competition for available homes. We saw this effect dramatically during 2020-2021 when 30-year fixed rates dropped below 3%, according to Freddie Mac's historical data.
Constrained construction and development. Supply chain issues, labor shortages, restrictive zoning laws, and limited available land can all restrict new home construction. When new supply can't meet demand, existing inventory becomes increasingly valuable. The combination of pandemic-era supply chain disruptions and historically tight lending made it more expensive to build new homes from 2021 through 2024, putting additional strain on national housing inventory according to multiple industry sources.
The national housing market has been seller-dominant for several years, though conditions are moderating as we move into 2026. According to U.S. News & World Report's housing market predictions for 2025-2030, the lock-in effect resulting from homeowners sitting on mortgages well below 6% has kept inventory levels under historical norms. As of Q4 2024, Realtor.com estimated that 82% of homeowners with mortgages had interest rates below 6%, down from nearly 93% in early 2023 and projected to approach 75%.
What this means practically is that as this lock-in effect gradually wanes, expect more sellers to list their homes for various reasons—employment changes, family size changes, or even just to access built-up equity for other purposes. This gradual inventory increase should continue to moderate the extreme seller advantages seen in 2021-2022.
However, here's the reality: seller's markets don't disappear overnight. According to NAR's existing-home sales data from May 2025 reported by Bankrate, sales fell year-over-year by only 0.7%, and the median home-sale price hit $422,800—an all-time high for the month marking 23 consecutive months of year-over-year price increases. Even as inventory improves, strong underlying demand continues to support seller advantages in many markets.
Specific regional markets may swing to seller-favorable conditions faster than others based on local employment, migration patterns, and development constraints. Markets with significant tech employment, limited geography constraining expansion, or restrictive zoning typically maintain seller advantages even when national conditions moderate.
You can't just look at national headlines or hear about things from friends in other cities to figure out what's going on in your own local market. You need to look at real data. Here's how to really figure out what's going on where you want to buy or sell:
Look at how many homes are for sale right now in the area you want to buy in. The main rule is that a larger inventory is better for buyers, while a smaller inventory is better for sellers. Your real estate agent, Realtor.com, and local real estate websites that collect MLS data all have access to this information.
Also, keep an eye on new homes being built in your area. A lot of new development can help with inventory shortages in seller's markets or make inventory shortages worse in buyer's markets by lowering prices because there is more competition for supply. J.P. Morgan's analysis shows that builders often have the financial room to lower prices or offer incentives for affordability to keep sales going. This puts even more pressure on resale markets because buyers who would have bought existing homes choose new homes with better deals.
Look at homes that are similar to the one you're thinking about buying in terms of age, size, location, neighborhood, and features. If homes that are similar to yours always sell for more than their asking prices, that's a clear sign of seller-market conditions. On the other hand, if homes often sell for less than the asking price, buyers have the upper hand.
Multiple sources looked at housing market data from September 2025 and found that U.S. home prices were only 1.7% higher than the year before, with a median price of $435,331. Homes sold were up 7.4% year-over-year to 442,578 units. The fact that prices have only gone up a little bit compared to the double-digit gains of 2021–2022 suggests that the market is cooling down from its most extreme seller-friendly period.
Don't forget to look at foreclosure rates when you do your research. When there are a lot of foreclosures in a market, buyers can sometimes buy properties for less than their market value because lenders want to get rid of them quickly.
One of the most reliable signs of the market is how long homes stay on the market before they go under contract. Homes sell quickly in seller's markets, sometimes within days or even hours of being listed. In a buyer's market, listings stay up for weeks or even months before getting good offers.
This metric changes a lot depending on the price and location, so make sure to compare it within your own market. In most markets, a luxury home takes longer to sell than a starter home. This isn't because of the way buyers and sellers interact, but because there are fewer qualified luxury buyers.
Pay attention to how sellers set their prices and change their listings. In buyer's markets, prices go down a lot because sellers lower their expectations to get more buyers. Data from Altos Research at the end of 2024 showed that 38.2% of homes for sale had lower prices than their original list prices. This was higher than the normal year-end level of 35%, which meant that buyers were starting to have some power.
In a seller's market, the first list price may be set a little lower than the market value on purpose to get more offers and start bidding wars. This strategy works when there is a lot of demand and buyers are willing to fight hard for it.
Keep an eye on current mortgage interest rates and know how they're changing. You can keep an eye on rates through Freddie Mac's weekly Primary Mortgage Market Survey and through lenders like AmeriSave, who give daily updates on rates. Freddie Mac's survey for the week ending November 6, 2025, found that the average 30-year fixed-rate mortgage was 6.22%, and the average 15-year fixed-rate mortgage was 5.50%.
Higher rates usually make it harder for buyers to compete because they make some buyers unable to afford the market, which could give buyers an advantage over time as inventory builds up. Lower rates usually make buyers want to buy more and make sellers stronger. But the relationship isn't always clear-cut. If rates drop a lot from high levels, the sudden influx of new buyers can make competition stronger for a short time until things settle down.
It's helpful to know how mortgage rates relate to other economic indicators. The Federal Reserve sets the federal funds rate, which has an effect on mortgage rates but does not directly set them. The 10-year Treasury yield is often a better indicator of where mortgage rates are going because mortgage-backed securities and Treasury bonds compete for investors' money.
If you're lucky enough to be looking for a home when the market is good for buyers, here's how to get the most out of it:
Time is one of the most important luxuries in a buyer's market. You can really think about your decisions, compare several properties carefully, and avoid the rushed panic that leads to regret when you don't have dozens of other buyers breathing down your neck. We at AmeriSave want our clients to remember that buying a home is probably the biggest financial commitment they'll ever make. It's not only okay to take your time to look at your options, it's smart.
Go to properties at different times of the day to see how traffic flows, how loud it is, and how people in the neighborhood get along. Come back for a second or third showing to see things you missed the first time. Look into the school districts, commute times, local development plans, and property tax rates. In a crazy seller's market, these due diligence steps are almost impossible, but when there is enough inventory, they are very possible.
Before making offers, take a lot of tours. Knowing what's out there helps you spot real value when you see it, and it also makes you a better negotiator because it shows you've looked at other options. This information stops sellers from convincing you that their property is one of a kind when there are similar homes for sale down the street.
Find a local real estate agent who knows a lot about the area and can get you MLS data, give you information about neighborhoods, and find properties before they show up on big consumer websites. AmeriSave works with real estate agents all over the country who know the ins and outs of the local market and can help you find homes that fit your budget and lifestyle.
Look closely at sales that are similar to yours, which real estate agents call "comps." If similar properties recently sold for less than the current asking price on a home you're considering, you've identified clear leverage for negotiation. Your agent can get official comp reports from the MLS that show detailed sale information to back up your offer price.
Be aware of how your target property is different from recent sales. If the comparables include properties that sold for less but were in better shape or had more desirable features, you have a good reason to make a lower offer.
When properties have been on the market for a long time without selling, it shows that the seller is desperate. Sellers usually get more motivated the longer their home stays on the market. You can ask your agent to look into the history of the listing to see if the property has been listed more than once or had its price drop. Both of these things make your negotiating position much stronger.
But you should also look into why the house hasn't sold. Sometimes homes don't sell because of problems that can be fixed, like bad photos, high prices, or not enough advertising. Other times, buyers stay away because of big problems like structural flaws, hard-to-reach places, or title issues. Knowing the cause helps you find diamonds in the rough and stay away from problem properties.
Buyer's markets give you chances to get other valuable concessions, even if you can't get the price down as low as you want. Ask the sellers to pay for some or all of the closing costs. This will help you save money for moving costs, furniture, or an emergency fund. Instead of just accepting the home as-is, ask the sellers to make certain repairs that were found during the inspection.
Think about asking for a home warranty that covers major systems and appliances for the first year you own the home. This will give you peace of mind and may save you money if something breaks. If you're buying with a mortgage, you might be able to get the seller to pay for a rate buy-down, which lowers your interest rate and monthly payment.
If you want to sell your home when there are more homes for sale than buyers, you need to think strategically and set realistic goals. Here's how to make your property stand out in the market:
In a buyer's market, buyers have options, so they are less likely to ignore problems that have been put off or are obvious. Before putting your home on the market, take care of any repairs that need to be done instead of waiting for them to come up during buyer inspections. Fix leaking faucets, fill in cracks in the drywall, replace broken fixtures, service HVAC systems, and take care of any safety issues.
Think about making strategic changes that will give you a good return on your investment. For example, you could paint the inside of your house in neutral colors, update the light fixtures, change the cabinet hardware, or make the outside of your house look better by landscaping. These updates, which don't cost a lot, can help your home compete well with newer or recently renovated homes on the market.
When buyers are looking at several properties, how they look is very important. Hire professionals to clean your whole house, even the parts that are often missed, like the baseboards, light fixtures, windows, and grout. The clean look and smell show that the house has been taken care of.
Take down personal photos, collectibles, and unique decorations that make it hard for buyers to picture themselves living there. The goal is to make a neutral, inviting space that will appeal to as many buyers as possible. If your furniture is old or your rooms feel small, you might want to hire a professional stager to arrange the furniture in the best way possible and bring in rental pieces that really show off each room.
In a market where there are a lot of competitors, the quality of your marketing has a direct effect on your sales. You can't negotiate on professional real estate photography. Amateur photos taken with smartphones can't compete with well-lit, well-composed photos taken by experienced photographers with professional equipment.
Think about using more marketing tools, such as drone footage that shows off the property and neighborhood, video tours, virtual 3D walkthroughs, and social media ads that are aimed at specific groups of people. These tools help your listing stand out in a crowded market and get in touch with buyers who might not find your property otherwise.
In a buyer's market, pricing is probably your most powerful tool. Look at a lot of recent sales of similar homes to get a better idea of what your home is really worth, not what you want it to be worth or what you need to pay off your mortgage. Under these conditions, buyers have time to do their research and will know right away if a listing is too expensive.
Some sellers in buyer's markets list their homes for a little less than what they are worth to get people interested right away and maybe even start a bidding war. However, this strategy is risky because it might not work and not get the competition they want. More often than not, pricing your home at or just below recent sales of similar homes makes it look like a great deal, which can bring in serious buyers and help you sell it faster with less price negotiation.
Keep a close eye on showing activity and buyer feedback with your agent. If you're not getting showings even though your listing is new, your price is probably too high. If you're getting showings but no offers, the price may be right, but the condition of the property or other things may be making people hesitate.
Buyer's markets give buyers more power in negotiations, so sellers need to be flexible. Be realistic about the offers that are likely to come in below the asking price, and get ready to counter instead of automatically rejecting them. If it means closing the deal, think about paying part of the buyer's closing costs. This is because keeping the home longer with mortgage payments, taxes, insurance, and utilities may cost more than the concession.
If there are problems with the inspection, deal with them in a practical way. You don't have to fix every little problem, but addressing real issues or giving credits shows good faith and keeps deals moving forward. If a sale falls through, you'll probably have the same problems with the next buyer, and maybe even more buyers, as word spreads about the inspection results.
To get through conditions that are good for sellers, you need to be determined, prepared, and think strategically:
In a seller's market, homes that are in high demand often get more than one offer within hours or days of being listed. If you find a property that fits your needs and budget, make an offer right away. You could miss out on chances if you wait even 24 to 48 hours.
This sense of urgency is why getting preapproved for a mortgage is so important. AmeriSave's streamlined preapproval gives you peace of mind about your price range and shows sellers that you're a serious, qualified buyer. Before you start looking for a house, make sure you have your financing in order so you can move right away when you find the right one.
It's frustrating, but it's important to remember that buyers don't have much power in seller's markets. If you try to negotiate a lot on price, contingencies, or closing dates, you will probably lose the property to buyers who are more willing to work with you. In these situations, the buyers who do the best are the ones who know what's really non-negotiable and what's just preferred, and they use their limited negotiating power to focus on those things.
If you really want a home inspection (and most buyers should), you should know that you might have to take the property as-is without negotiating repairs. If you need a financing contingency, you should know that you're at a disadvantage compared to cash buyers or people who don't want this protection. You might need to offer a higher price to make up for it.
Sellers really like buyers who can pay cash because these deals don't have any risks related to financing and usually close faster. The NAR's 2025 Profile of Home Buyers and Sellers says that 26% of all home buyers paid cash, which is the highest percentage ever. Most buyers can't do this, but if you can afford to make an all-cash offer, it gives you a huge edge over other buyers.
If you need a loan, you might want to put down more earnest money than usual—maybe 3–5% of the purchase price instead of the usual 1–2%. This shows that you have a lot of money and are very serious about closing, which protects sellers in case the deal falls through.
Buyers have to be very patient in seller's markets. It's demoralizing to miss out on a lot of properties, and it's easy to get desperate and overbid a lot or buy something that doesn't really meet your needs just to "finally" get what you want. This desperation makes people regret their purchases and sometimes even causes real financial problems.
It's better to wait for the right property at a price you can really afford than to settle for something that isn't right or to stretch your finances too far. Keep in mind that you'll have to live with this choice for a long time, probably even after the market changes.
Knowing when to walk away is the other side of being patient. Some buyers get so tired of losing in seller's markets that they make offers on homes they wouldn't have thought about before. Buying a home is a big financial and emotional commitment. If you don't have to move right away, it's better to wait for a home that fits your needs and budget than to settle for something that doesn't.
At AmeriSave, we've helped clients who put their home search on hold for months because they thought the market was too unstable and they were waiting for more homes to become available or their finances to improve. This patience often pays off more than making a bad purchase.
Seller-friendly conditions give you chances to get the best price and terms for your sale, but you still need to use smart strategies:
First impressions are important, even in a seller's market. Before you put your home up for sale, make sure it is clean and organized. Keep it that way during showings. People who look at a lot of homes in a short amount of time will remember the ones that stood out and forget the ones that looked the same.
The good news is that you probably don't need to make big changes to your home in a hot seller's market. When there aren't many homes for sale, homes with old kitchens or bathrooms can still sell quickly. But keeping things clean and tidy doesn't cost much and can help buyers decide between similar properties.
Many sellers in hot markets list their homes for sale at or just below market value to get people interested right away and maybe even start bidding wars. This plan can work well, and sometimes it leads to sale prices that are much higher than the asking price. But you have to be willing to take the risk that you priced your asset too low if you don't get multiple offers.
Pricing at the high end of the range of similar sales can also work when there isn't much inventory, but you may have to wait a little longer for the sale to happen. Talk to your agent about recent sales in your area and price range to figure out which method works best for your schedule and budget.
The highest bid isn't always the best offer. A slightly lower offer from a qualified buyer with strong financing approval, few conditions, and a flexible closing timeline may be more valuable than a higher offer with a lot of conditions and uncertainty about financing.
Think about whether the buyers have been preapproved or just prequalified. Preapproval is more reliable because it involves checking their finances. Look into the type of financing. Conventional loans are usually easier to deal with than FHA or VA loans, but all of these are valid ways to get money. Look over the contingencies carefully. The fewer conditions there are on the offer, the more likely it is to go through.
Before you take a buyer's offer seriously, make sure they can show you proof of a real mortgage preapproval from their lender. A lender's preapproval letter should show that they have checked the buyer's income, assets, and credit and that they can get financing at the offer price, as long as the property is appraised and the final underwriting is done.
This keeps you from wasting time with buyers who aren't qualified and whose offers will fall through when they can't get financing. AmeriSave sends out detailed preapproval letters that make sellers feel good about the fact that our borrowers have been thoroughly checked out and are likely to close successfully.
Know what contingencies are in offers and how they affect your risk. If the property appraises for less than the contract price, the buyer can back out of the deal. This risk goes up when prices rise quickly in hot markets and appraisals have a hard time keeping up.
With an inspection contingency, buyers can either negotiate repairs or back out of the deal based on what the inspection finds. You should definitely let buyers look at the properties they're buying, but keep in mind that negotiations over inspections can ruin deals that are otherwise solid.
In very hot seller's markets, some buyers give up these conditions to make their offers more appealing. However, this is risky for them and doesn't always help you if the deals fall through. Instead of just picking the offers with the fewest conditions, think about how reliable and reasonable the contingencies are.
As of November 2025, the national housing market is in a transition period. It’s moving away from the extreme seller advantages of 2021–2022 and toward more balanced conditions, though there are big differences between regions.
The lock-in effect still has a big impact on how supply works. Based on research done in the U.S. According to News & World Report, about 82% of homeowners with mortgages had rates below 6% as of the fourth quarter of 2024. This was down from 93% in early 2023 and is expected to drop to 75%. As the interest rate difference between their current mortgage and available rates gets smaller, more homeowners may be willing to move.
The problems that first-time home buyers face are at an all-time high. According to NAR's 2025 Profile of Home Buyers and Sellers, only 21% of the market is made up of first-time home buyers, and the median age of these buyers is 40, which is much older than the 29-year median in 1981. The median down payment for first-time home buyers was 10%, which is the highest level since 1989. Of these buyers, 59% used their own savings, 26% used financial assets like 401(k)s and stocks, and 22% got gifts or loans from family and friends.
Jessica Lautz, NAR's deputy chief economist, said that the market is "a tale of two cities." Buyers with a lot of equity in their homes make bigger down payments and all-cash offers, while first-time buyers have a hard time getting into the market at all. Shannon McGahn, NAR's executive vice president and chief advocacy officer, said that waiting to buy a home from age 30 to age 40 could mean losing about $150,000 in equity on a typical starter home.
There’s a big difference between regional markets. According to Realtor.com data from November 2025, 17 states had more active inventory than they did before the pandemic in October 2019. This included major markets in Florida, Texas, Arizona, and Colorado. These places saw big price increases during the pandemic that were faster than income growth in the area, making it hard to afford things. Inventory has either returned to normal levels or gone above historical levels, thanks to more new homes being built, especially in Sunbelt markets.
On the other hand, multiple studies show that the Midwest and Northeast markets are generally still tighter, with inventory still below pre-pandemic levels. Because of these differences between regions, national statistics don't always show what's going on in your area. In Tampa, there may be a buyer's market, but in Chicago or Boston, there may still be a seller's market.
Mortgage rates are still a big part of what makes the market work. Freddie Mac says that rates for 30-year fixed mortgages peaked above 7% in early 2025 and have since dropped to 6.22% as of November 6, 2025. Sam Khater, Freddie Mac's chief economist, said that the current rates could help home buyers save thousands of dollars a year on median-priced homes compared to earlier in 2025. This shows that homes are becoming more affordable.
Rates are still much higher than they were in 2020–2021, when they were below 3%, and they are also higher than the historical average of about 7.8% since 1971. Fannie Mae, Freddie Mac, and the Mortgage Bankers Association all say that rates will stay in the low to mid-6% range through the rest of 2025 and into 2026. They expect slow, steady improvements rather than big drops.
It's more important to know how the housing market works in your area than to read national news. This is true whether you're buying your first home or selling one you've owned for years. The U.S. housing market as a whole is moving toward more balanced conditions. However, your experience will depend on the local inventory, pricing trends, competition levels, and economic conditions where you are actually buying or selling.
Even in a seller's market, it can be worth it to buy if you plan ahead, don't pay too much, and really need to move. You can sell your home in a buyer's market if you set a fair price, make your home look good, and are willing to change your mind during negotiations. Ignoring the facts about the market instead of adapting to them usually leads to the worst decisions.
Getting your money in order before you need it is the most empowering thing you can do. At AmeriSave, we base everything we do on giving you clear, open mortgage preapproval that makes you feel good about your budget and shows sellers that you're a serious buyer. Our digital tools make what has always been a frustrating and unclear process easier. They give you control over your home financing journey, whether you're a first-time home buyer at 40 trying to break into a tough market or a repeat buyer using the equity in your current home.
It's impossible to know when the next big change in the market will happen or if your neighborhood will still be a buyer's or seller's market six months from now. But knowing the signs, getting your money in order, and working with experts who know what they're talking about will help you act quickly when the right chance comes along, no matter what the market is like overall.
Check three main signs for your area: the number of active listings, the average number of days on the market, and the difference between recent sale prices and asking prices. Ask a few local real estate agents for the most up-to-date market data for the neighborhoods you're interested in. These experts can get MLS data that shows how many homes are currently for sale, how quickly they are selling, and whether the prices of homes that are selling are higher or lower than the prices that are listed. You can also look at public data on real estate websites that combine MLS data to see how many homes are on the market and how prices are changing. If homes in your price range have been on the market for more than 45 to 60 days without selling, prices are going down often, and homes are selling for less than their asking price, that means it's a buyer's market. On the other hand, if listings go under contract in 7 to 14 days, homes often sell for the asking price or more, and there isn't much inventory, you're in a seller's market. Keep in mind that markets can be very different even in the same big city, so instead of looking at citywide statistics, focus on the neighborhoods you're interested in.
A balanced market is good for both sides because it makes sure that neither buyers nor sellers have too much power. This happens when supply and demand are roughly equal and there are about six months' worth of homes for sale. In balanced markets, homes sell in a reasonable amount of time, usually 30 to 60 days. Prices stay mostly stable, with no big jumps or drops, and both sides can negotiate a little on price and terms without one side having all the power. Buyers have enough time to find the right properties and do their due diligence, which includes inspections and appraisals. Sellers can find qualified buyers and get fair market value without having to lower prices too much or wait too long. These balanced conditions don't give either side a big advantage, but they do make transactions go more smoothly than they would in a market where buyers or sellers are very strong. But markets that are really balanced are less common than those that lean at least a little toward buyers or sellers. This is because the different economic factors that affect real estate don't always line up perfectly to keep things in balance.
Major economic events can cause markets to change very quickly, but most of the time they change more slowly. The pandemic is a great example of sudden changes. In 2020–2021, interest rates fell to their lowest levels ever, which led to an unprecedented surge in buyer demand that quickly wiped out existing inventory and created a seller's market that lasted for more than two years. On the other hand, when the Federal Reserve raised rates sharply in 2022 and 2023, buyer demand dropped off pretty quickly because many potential buyers couldn't afford to buy. But these were very unusual situations. More often, markets change slowly over 6 to 18 months as interest rates, construction activity, demographic trends, employment patterns, and economic conditions change. For certain areas, local factors can speed up or slow down these changes. Big employers moving or closing down, natural disasters, big policy changes that affect housing, or big changes in desirability can change the dynamics of the local market faster than national trends would suggest. This is why keeping an eye on the specific indicators in your local housing market is much more important than reading the national housing news. Keeping an eye on new trends in your area can help you time your purchase or sale better, or at least help you set realistic expectations about what will happen.
To make your offer stronger within your budget, focus on things you can control. Instead of just being prequalified, get fully preapproved for your mortgage from a trusted lender like AmeriSave. This will give sellers more confidence that your financing will go through. Put down more earnest money than usual, maybe 2–3% instead of 1%, to show that you are really committed. Make a clear offer with as few conditions as possible, but make sure you are safe on important issues like inspections and financing. Talk to your agent about whether it's a good idea to offer more than the asking price based on similar sales, but don't get into bidding wars that make you spend more than you can afford. If you can, be open to changing the closing date to fit the seller's schedule. You might want to offer an appraisal gap guarantee. This means that if the appraisal comes in low, you agree to pay some amount above the appraised value out of your own pocket. However, only promise amounts that you can actually afford. Write a short letter to them explaining why you love their home. Be patient and keep your expectations realistic. You might lose a few homes before you find one that works for you. Don't make decisions out of desperation that you'll regret later. Even if it takes longer to find the right home at a price you can afford, it's worth it.
The best order depends on your own finances and the state of the local market. Selling before buying gives you the clearest picture of your finances because you'll know exactly how much equity you're leaving with. It also removes the risk of having two mortgages at the same time and gives you a set time frame for your move. This way is usually less stressful on your wallet, and it lets you make better offers on your next home without having to sell your current one first, which sellers like. However, selling first means you'll need temporary housing if you can't find and close on your new home before your sale closes, you may feel rushed to buy quickly to avoid moving twice, and you could miss out on great properties that sell quickly while you're searching without a current home. Buying before you sell lets you move directly from one home to another on your own schedule. It also gives you more time to find the right next home without having to worry about where you'll live in the meantime. Plus, you won't lose your dream home because you haven't sold your current one yet. The downsides are that you might have to carry two mortgages for a while, which can put a lot of strain on your budget. You might also have trouble getting your new mortgage while still paying off the debt on your current home. Finally, your current home might take longer to sell or sell for less than you thought, which could leave you in a bad financial situation. For a lot of homeowners, making the purchase dependent on selling their current home is a good compromise, but sellers don't like these kinds of offers as much, especially in competitive markets. You might want to talk to a financial advisor and a loan officer at AmeriSave to see how different situations would play out based on your income, assets, debts, and the likely equity from your current home. This will help you figure out which option is best for you.
In competitive markets, getting preapproved for a mortgage is now a must. Even in balanced or buyer-friendly markets, it's becoming more common. When you get preapproved, the lender looks at your whole financial situation. They check your income through pay stubs or tax returns, look at your assets through bank statements and investment accounts, pull your credit report to see your credit score and debt obligations, and then tell you the maximum loan amount you can get based on this information. This is very different from prequalification, which is just a quick look at the information you give verbally without checking it. Sellers and their agents see preapproval letters as proof that you're a serious, qualified buyer who can actually close the deal, not just someone who is wasting their time. When there are multiple offers, sellers often throw out offers from buyers who haven't been preapproved or who have only been prequalified. This limits their options to buyers who have shown that they are financially ready. Preapproval also helps you as a buyer because it gives you a realistic budget before you start looking, stops you from falling in love with homes you can't afford, speeds up the closing process because most of the financial paperwork has already been looked at, and may even help you find credit problems or missing paperwork that you can fix before making offers. The preapproval process usually takes 24 to 72 hours with quick lenders, and it lasts for 60 to 90 days. However, if you're shopping for more than that, you may need to get new paperwork. At AmeriSave, we've made the preapproval process as quick and easy as possible. This gives sellers the peace of mind that comes from thorough financial verification, which gives our borrowers an edge, especially in markets where multiple offers are common.
There are a number of programs that help first-time home buyers get over the problems of affordability and down payments that keep many young families from owning their own homes. FHA loans, which are backed by the Federal Housing Administration, let borrowers with credit scores of 580 or higher make down payments as low as 3.5%. This makes them easier to get than traditional loans, which usually require 5% to 20% down. VA loans for eligible veterans and active military service members cover the full cost of the home with no down payment and usually don't require private mortgage insurance. This makes them a great deal for those who qualify. If you meet the income requirements, USDA loans for properties in eligible rural and suburban areas can also give you 100% financing. However, you can only use this program in certain areas. Through programs like Fannie Mae's HomeReady and Freddie Mac's Home Possible, which are made for people with low to moderate incomes, qualified borrowers, especially first-time buyers, can now put down as little as 3% on a conventional loan with private mortgage insurance. Many state and local housing finance agencies have programs for first-time home buyers that give them grants or low-interest loans to help with their down payments. They may also offer lower interest rates or tax credits. Some of these programs work with federal programs like FHA loans to give people a lot of benefits at once. Some big companies offer employee benefits like down payment help or forgivable loans through employer-assisted housing programs. Don't forget that family members can help with the down payment, which is allowed for most loan programs, but there are certain rules about how to document the gift. AmeriSave is an expert at helping first-time buyers figure out which programs will give them the best deal for their unique situation. The most important thing is to look into the programs that are available early on in your home search and work with a lender who knows a lot about them. They can explain the requirements for eligibility, help you gather the paperwork you need, and point you in the direction of the financing options that are best for your financial situation and goals for homeownership.
Fact Checked
