Navigating the Housing Market: From a Financial Advisor
The past few years may not have been the smoothest for people trying to navigate the housing market. Homebuyers have grappled with a mix of record-high prices, steep mortgage rates, and a lack of available homes. And while sellers might benefit from elevated home values, many may face the same hurdles when it comes to finding their next place.
According to the National Association of Realtors, 2023 saw the fewest existing home sales since 1995. In January 2024, home affordability reached its lowest point in 20 years. Home prices rose faster than incomes, according to the Federal Reserve Bank of Atlanta. Meanwhile, the average 30-year fixed mortgage rate pushed back above 7%.
As the busy spring buying season approaches, though, there may be reason for cautious optimism. Mortgage rates have started to dip slightly, and some areas are seeing a welcome boost in housing supply.
“There’s a more hopeful tone this spring,” says Kimber White, president-elect of the National Association of Mortgage Brokers. “If rates stabilize in the mid-to-low 6% range, it could draw more buyers into the market and encourage sellers who’ve been holding onto ultra-low rates to finally list.”
“New builds are also helping expand the inventory picture”, adds Michael Mariani, VP of lending solutions at Fidelity Investments. States like Texas and Florida are seeing meaningful growth possibly due to new construction. On the other hand, in places like the Northeast—where the market leans more heavily on existing homes—competition remains intense.
“Supply-and-demand trends look very different depending on the region,” Mariani says. “New construction is really shifting the dynamic in some markets.”
The Realities of House Hunting in a Tight Market
Steven Antonio and his wife have experienced these challenges firsthand. As first-time buyers searching in the New York/New Jersey area, they’ve encountered repeated roadblocks due to tight inventory. One of their biggest goals is to settle in a neighborhood with strong schools for their young daughter—but finding the right home at the right price has been elusive.
“We’ve been looking for years, and the selection is just not there,” Antonio shares. After losing out on a property in Chatham, NJ earlier this year, the couple opted to renew their apartment lease in New York City—though they remain ready to jump if the right listing pops up.
While markets like the Northeast are especially fierce, White cautions that buyers everywhere should manage their expectations. “We’re not going to see a massive surge in listings,” he says. “The landscape may improve slightly in 2025, but the days of rock-bottom interest rates are behind us—for now.”
Strategic Moves for Today’s Buyers
Despite the headwinds, it's still possible to find success in this housing market—especially with a game plan. If you're thinking about buying a home this year, here are five key steps to consider:
1. Know Your Budget and Stick to It
It’s easy to let emotions take over during a competitive home search. But establishing a firm budget—and honoring it—is crucial. Use mortgage calculators to estimate your price range and get a realistic sense of monthly payments and overall costs.
Getting preapproved for a mortgage is another important step. “Preapproval strengthens your offer and shows sellers you’re serious,” says Mariani.
2. Explore Down Payment Options
Rising prices may often mean larger down payments—but 20% isn’t a hard requirement. “Many first-time buyers qualify for loans that allow for lower down payments,” Mariani explains. FHA loans, for example, offer down payments as low as 3.5%.
If you do put down less than 20%, you may have to pay for mortgage insurance, such as PMI. While it adds to your monthly cost, it can be removed once you build sufficient equity—depending on the loan type.
3. Be Open to Creative Financing
As affordability challenges persist, more lenders are rolling out flexible financing tools. Temporary buydowns and adjustable-rate mortgages (ARMs) are becoming more popular.
ARMs offer a lower initial interest rate, which can make them appealing—especially if you don’t plan to stay in the home long-term. “But be sure you can handle the highest possible rate down the line,” warns Mariani.
4. Shop Around for Lenders
Different lenders may offers different rates, fees, and terms. Meeting with several may help you find the best deal. “Just talking to multiple lenders can result in a better rate,” says Mariani. And trust your gut—personal rapport with your lender matters too.
5. Keep Perspective
Searching for a home can be exhausting, especially in a competitive market. But mindset matters. “We don’t have a crystal ball,” Antonio reflects. “Yes, it’s frustrating—but we’re lucky we can afford to wait and make a smart decision.”
Even with recent improvements, today’s market demands patience, planning, and flexibility. With the right approach, though, homeownership can still be within reach.
Sources:
https://www.fidelity.com/learning-center/personal-finance/housing-market
Disclosures:
This information is an overview and should not be considered as specific guidance or recommendations for any individual or business.
This material is provided as a courtesy and for educational purposes only.
These are the views of the author, not the named Representative or Advisory Services Network, LLC, and should not be construed as investment advice. Neither the named Representative nor Advisory Services Network, LLC gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your Financial Advisor for further information.
