The Market Has Finally Settled — And That’s a Good Thing

For almost three years, the housing market has felt like a never-ending waiting game. Since 2022, buyers, sellers, and armchair experts have all said the same thing: “Let’s just wait and see what happens.”

Uncertainty. Crash. Boom. Repeat.

Well — I think it’s safe to say: we’ve seen it.

The guessing phase is over — and when you connect the dots, it’s pretty clear where we stand.

Interest Rates: The Return to Normal (Even if It Doesn’t Feel Like It)

The Federal Reserve has now cut rates for the second time this year, signaling a shift back to steady, deliberate policy rather than the wild swings we saw before, during, and after the pandemic.

Mortgage rates haven’t come down to where policymakers wish they would, and probably won’t. Instead, they’ve settled into the 5–7% range — a level that’s normal, sustainable, and reflective of a balanced economy, not a crisis.

I get why that feels strange. We’re all viewing today’s rates through a heavy dose of recency bias. Since 2008, we’ve been spoiled by historically low borrowing costs — and every time rates started to rise, something came along to knock them back down: a global pandemic, trade turbulence, market panic, or spikes in the unemployment rate.

Those moments created an artificial sense of affordability. Buying a home felt easier — whether you were a first-timer or downsizer — because money was unrealistically cheap. What we have now isn’t a step backward; it’s a return to economic gravity.

A Slow Market That Refuses to Act Like One

At the same time, housing activity in 2025 remains slow — like, really slow.

Fewer homes are trading hands than normal for the third year in a row, following two of the lowest-volume years in three decades.

By every economic standard — higher rates, lower demand, and fewer buyers in the pool — this should be the perfect recipe for a market correction. It’s the kind of example that would show up in your old Econ 101 textbook (you know, the one collecting dust on your shelf).

But 2025 isn’t following the model. Prices aren’t falling. In fact, they’re still edging up.

Prices Haven’t Blinked

So why aren’t prices falling? Because the conditions that make prices fall — distressed sales, forced sales, and massive job losses — simply aren’t here.

Think about it: appraisals and comps are built on closed sales. If 20% of those sales are distressed and selling 20% below market (like we saw in 2008), they pull down the “average” price for everyone else, even if normal sellers would never have accepted those numbers.

That’s why distressed volume is such a powerful market mover. It resets the benchmark for what every other home in the neighborhood is worth on paper.

But today, we’re nowhere near that. Roughly half of U.S. homeowners have 50%+ equity, adding up to an astounding $18 trillion in home equity nationwide. And only 1 in every 4,000 sales is a foreclosure which is historically low.

Add in a strong job market, and you have a simple equation: most people are selling because they want to, not because they have to. And that’s exactly why home values have stayed so remarkably steady.

So Where Does That Leave Us?

Bottom line: rates are settling into the 5 to 7 percent range for the foreseeable future. The Fed has made it clear that we’re in a phase of small, measured moves from here — not the whiplash we saw during the pandemic or the overcorrection of 2022, when rates doubled in a single quarter.

And as for prices? There’s simply no evidence they’re heading lower.

If you’re a buyer, the “wait and see” game can officially be retired. We’ve waited, and we’ve seen. This is the market. It’s stable, gradually becoming more expensive, and those 2% mortgages from 2020 aren’t coming back. Waiting for perfect conditions now just means paying more later.

If you’re a seller, perspective matters. From 2002 to today, we’ve lived through every version of volatility: the boom, the crash, the rebound, and the pandemic spike. Home values doubled in the seven years leading up to COVID — and in many areas, doubled again during it. That’s not the norm. Historically, home values take about 24 years to double.

So if I had to lay a bet, we’re heading back to the old model: moderate rates, steady appreciation, and a market that rewards patience and fundamentals.

And honestly, that’s healthy. That’s the kind of housing market that built the American middle class.

Oh, if you’re a young or first-time buyer, don’t sit it out just because it’s hard. It’s always hard to buy your first home — but time in the market still beats timing the market.

After three years of uncertainty, real estate has found its rhythm again. And this time, it’s a beat everyone can move to.