If the thought of dipping a toe into the housing market conjures the “Jaws” theme in your head, you’re far from alone. For many prospective homebuyers, the high price of most homes feels insurmountable — like they’ll be stuck in rough waters forever. This anxiety has been reflected in headline after headline, as well as the opinions of pundits galore.
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However, there are some promising signs that the waters might be smoothing out and becoming, if not quite tranquil, then at least easier to sail on. Some experts foresee a softening in home prices that might make homeownership a little more affordable. But before you take a deep dive into the housing market, there are a few things to know.
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1. Mortgage Rates May Be High — but They Are Expected To Decline
There’s no sugarcoating it: Mortgage rates are higher than they’ve been in a long while, still hovering in the mid-6% range, and that’s a tough pill to swallow for homebuyers. But here’s the good news — they’re not expected to stay this high forever.
According to updated projections from U.S. News, most analysts expect 30-year fixed rates to average between 6% and 6.7% this year, depending on how the economy evolves. For instance, Fannie Mae sees rates dipping to 6.2% by year-end, while Wells Fargo forecasts a decline to 6%. Volatility is likely to persist, but the broader trend is leaning slightly downward.
In other words, if you’re feeling priced out today, you may get some relief in the months ahead.
2. Housing Inventory Is Still Tight — but There’s Movement
It’s no secret the housing market has been dealing with a serious inventory crunch. Many homeowners are understandably hanging onto their ultra-low mortgage rates from several years ago, wary of selling and being forced to reenter the market at today’s much higher rates.
But some signs of life are emerging. Builders are working through high inventory levels, and softening economic growth could push more homes onto the market. We’re not out of the woods yet, but buyers may start to see more options later this year.
3. Buyers Can Still Push for Some Home Concessions
Even with mortgage rates elevated, it remains a seller’s market. However, that doesn’t mean buyers have to shoulder all the costs to close a deal. You may be surprised to find that many sellers are still willing to offer concessions, from help with closing costs to funds for repairs.
According to data from Redfin, in Q1 of 2025, sellers gave concessions to buyers in 44% of transactions — up from 39% a year earlier. These concessions included money toward repairs, closing costs and mortgage rate buydowns. While these offers don’t reduce the home’s sticker price or the long-term interest rate, they can meaningfully lower your upfront costs.
4. Newly Built Homes May Offer (Slightly) Cheaper Options
While new construction homes still tend to be priced higher overall than existing ones, they’ve become more competitive, and in some cases, even cheaper on a per-square-foot basis. Zillow research found that in 2024, new homes sold for $3.50 less per square foot than existing homes.
Builders are also highly motivated to offer deals. Many are throwing in incentives like mortgage rate buydowns, waived lot premiums and upgraded finishes — especially if buyers are willing to use in-house financing. And because everything from the roof to the appliances is brand-new, you’re likely looking at reduced maintenance costs for years, especially when compared to existing homes that may have immediate repair needs before you even move in.
That said, new construction often means buying farther from urban centers, waiting months to move in, and dealing with less mature landscaping. But if you’ve got some flexibility in your timeline and you want a turnkey home that may come with builder perks, it’s worth considering.
There Are a Few Ways Buyers Can Put Themselves at an Advantage
The situation for buyers may still feel relatively bleak, especially compared to the advantages sellers currently enjoy. But there are ways to tilt the odds in your favor.
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Buyers who can remain flexible throughout the process — especially those willing to walk away — may find themselves in a better position to negotiate. Being open to new construction could also lead to cost savings, thanks to builder incentives like mortgage rate buydowns, waived fees or premium finishes. And by keeping an eye on mortgage rate trends, buyers may be able to better time their purchase and stretch their budget further.
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This article originally appeared on GOBankingRates.com: Are Home Prices Starting To Cool? 4 Key Things To Know Before Entering the Market
