The 'sweet spot' for frustrated homebuyers is on the horizon

"After years of constrained conditions, the 2025 housing market is giving buyers something they haven't had in a long time: options," said Danielle Hale, chief economist at Realtor.com, in a statement. "I expect this market momentum shift to magnify typical seasonal trends that favor homebuyers in the fall.”

Realtor.com said in its study buyers will have more homes to pick from, with 32.6% more active listings than at the start of the year, lower prices that could save buyers up to $15,000 from peak summer price tags and 30.6% less competition as other buyers sit out. 

And while affordability issues remain, the market is vastly different than it has been in previous years, with low inventory and fierce competition.

“In a year that's been the most buyer-friendly in nearly a decade, it's the best window of opportunity for homebuyers all year,” Hale said. 

The study also pointed out other advantages to buying in October, including:

"While the market has not yet tipped into a full 'buyer's market,' conditions are more balanced than they have been in years," Hale said. "This represents a significant shift after a period of historically tight supply and intense competition that left many home shoppers priced out."

Challenges for homebuyers

There's no doubt that homebuyers have been feeling the squeeze. Home prices nationally have grown rapidly since the onset of the Covid-19 pandemic. In the second quarter of 2020, the median sale price for U.S. homes was $317,100, according to data compiled by the Federal Reserve. By the second quarter of 2022, that number was $437,700, up 38%. It dropped to $410,800 in the first quarter of 2025, but that's still up nearly 30% from the early days of the pandemic five years ago.

It's not just prices either, as most potential homebuyers are expecting the cost of homeowners insurance to skyrocket in the coming years. A survey by Realtor.com of recent and prospective homebuyers found that 88% believe they will pay more for homeowners insurance in the near future, and 42% said they already have experienced a rise in homeowners insurance costs. Additionally, 75% said they believe homeowners insurance eventually could become unaffordable.

And it could take years before housing prices return to about 30% of income, a common affordability ratio that means the typical U.S. household purchasing a home would need to spend 30% of their income on their mortgage each month. A new analysis from real estate firm Redfin Corp. found that home prices could return to a state of normality by 2030 if mortgage rates drop to about 5.5% and price growth stabilized instead of continuing to rise.

Mortgage rates already have dropped to their lowest levels in nearly a year, bringing down the median monthly mortgage payment to about $2,604, about $200 below May’s all-time high, according to Redfin in a separate report.

A survey of 1,000 recent homebuyers by Truework for its 2025 Recent Homebuyer Report found 64% of Gen Z buyers and 65% of millennial buyers said it is important to their financial health to be able to refinance their mortgage. That is double the rate at which baby boomers say refinancing is important, at just 32%. The gap is just one aspect of a generational dynamic that is weighing heavily on a shifting housing market that's seeing buyers regaining leverage.