Homebuyers face rising prices and rates — but here’s how you can still get ahead in today’s market

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Vawn Himmelsbach

Tue, Apr 8, 2025, 3:55 AM 5 min read

With location prices continuing to emergence and owe rates remaining stubbornly high, is the American imagination of homeownership retired of reach?

Home prices jumped 3.8% successful February compared to the aforesaid clip past year, according to the latest National Association of Realtors (NAR) findings. That translates to a median outgo of $398,400 for a emblematic home.

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And portion owe rates are dilatory ticking down, the 30-year fixed-rate owe inactive averaged 6.65% arsenic of March 27, according to Freddie Mac.

But it’s not each atrocious news. Housing inventory is up 17% from a twelvemonth agone (from 1.06 cardinal to 1.24 cardinal units), which means homebuyers present person much options.

“Homebuyers are dilatory entering the market,” said NAR Chief Economist Lawrence Yun, successful a property release. “Mortgage rates person not changed much, but much inventory and choices are releasing pent-up lodging demand.”

While lodging inventory is up, proviso is inactive constricted comparative to demand, according to NAR’s Realtors Confidence Index. About 21% of homes sold supra database terms — though immoderate faced delays oregon terminations. First-time buyers represented 31% of location purchases, up from 26% a twelvemonth ago.

Still, the imagination of homeownership is slipping distant for galore Americans, peculiarly arsenic prices proceed to outpace wage growth.

Affordability remains adjacent historical lows crossed astir of the country, according to ATTOM’s first-quarter 2025 U.S. Home Affordability Report, with location expenses consuming 32% of the mean nationalist wage.

“With the highest buying play ahead, prices could emergence further, worsening affordability,” said Rob Barber, CEO of ATTOM, successful a release.

According to Zillow’s marketplace vigor index, neither buyers nor sellers presently person a wide vantage — astatine slightest not connected a nationalist level. But marketplace conditions alteration wide crossed the country. For example, authorities layoffs successful Washington, D.C. could pb to much listings, portion lodging shortages successful L.A. caused by January’s wildfires are apt to thrust up request — and prices.

Economic uncertainty is providing a “counterbalance” that volition beryllium felt much powerfully successful immoderate parts of the state than others, notes Zillow’s Housing Market Report for February 2025.