Home-Price Appreciation

Home-price appreciation is expected to slow to a more moderate pace of around 2% to 4% annually through 2025 and 2026, a significant shift from the rapid gains seen during the pandemic housing boom. At the same time, mortgage rates are projected to stabilize in the 6% to 7% range, remaining elevated compared to pre-2020 levels but lower than the recent peaks experienced in 2023–2024.

For buyers, this slower pace of price growth offers more negotiating power and a greater chance to find inventory without intense bidding wars. While prices aren't likely to drop dramatically in most markets, the cost of financing will continue to have the largest impact on monthly affordability. Sellers, on the other hand, will need to adjust their expectations and focus on competitive pricing and property condition, as the days of aggressive over-asking offers are largely behind us—especially in markets where inventory is increasing. Investors will find that equity growth may no longer be the primary driver of returns, making smart acquisitions, location, and consistent cash flow more important than ever. As the market normalizes, both buyers and sellers will need to be more strategic and informed when making decisions.

​Summary:
The housing market is entering a more balanced phase, with slower price growth and steady mortgage rates, creating a shift in strategy for buyers, sellers, and investors alike.