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Like an island on the horizon, owning a home has never felt more out of reach. Year after year, home prices have climbed higher, leaving many buyers fighting a headwind, wondering if they’ll ever catch a break.
In January, the S&P CoreLogic Case-Shiller Index — a key measure of national home prices — jumped another 4.1% year-over-year. February wasn’t any kinder, with the National Association of Realtors (NAR) reporting a 3.8% annual increase in the cost of existing homes.
But could relief finally be on the way? Housing inventory appears to be on the rise, which could lead to lower home prices. Several major real estate organizations — including Fannie Mae, the Mortgage Bankers Association and the NAR — expect home price growth to slow in 2025.
In Q2 2025, the median home price in the US was $410,800, down $12,300 from the previous quarter.
This shift in prices could benefit buyers, but sellers should keep slow market growth in mind.
One big reason home prices remain high is limited inventory. When supply is scarce prices tend to rise.
In February, housing inventory climbed 5.1% from the previous month and 17% year over year, according to the NAR. This growing supply could help stabilize or even reduce home prices. Many homeowners have been reluctant to sell in recent years due to high mortgage rates.
However, mortgage rates have fallen or remained flat since January. What’s more, the Federal Reserve announced a steady overnight interest rate of 4.00% to 4.25% on September 8, which indirectly impacts variable mortgages.
But if recession fears continue to mount, owners who need to immediately sell could face declining home prices. While this could provide relief to potential buyers — the housing market could still stall as people wait out the economic uncertainty.
While U.S. home prices are unlikely to plummet, inventory is gradually normalizing.
Some experts worry that factors such as tariff policies could fuel an economic recession, potentially dampening homebuyer demand and pushing home values downward. Some markets — particularly major job hubs — may be more insulated from these effects. However, all homeowners should be prepared.
As of the third quarter of 2024, the average U.S. homeowner had approximately $311,000 in home equity, according to CoreLogic.
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If you’re a homeowner, you may want to capitalize on the equity you have now — and protect yourself against a potential recession — by applying for a home equity line of credit (HELOC).
A HELOC could be a more flexible option than a home equity loan since it doesn’t require immediate installment payments. Instead, homeowners can access funds as needed.
Depending on the value of your home and the remaining balance on your mortgage, you may be able to borrow funds at a lower interest rate from a lender as a form of revolving credit.
Rather than juggling multiple bills with varying due dates and interest rates, you can consolidate them into one easy-to-manage payment. The results? Less stress, generally reduced fees and the potential for significant savings over time.
The answer depends on your situation.
Selling before prices drop could allow you to lock in a higher sale price. If you’re planning to move, you’ll likely pay more for your new property — potentially at a higher mortgage rate.
That said, now could be a good time to sell if you’re downsizing, especially if you won’t need to take out a mortgage on a smaller or less expensive home.
Ultimately, no one has a crystal ball to foresee when the right time to sell will be based on current market conditions. But another factor to consider is the possibility of a recession.
A recent Deutsche Bank survey puts the probability of a U.S. recession within between now and June 2026 at 43%. If you can afford your current home, it may be wise to sit tight rather than take on the financial burden of a more expensive home amid uncertain economic conditions.
If you’re not ready to sell, or you don’t own a home, you can still cash in on rising home prices by investing in the real estate market.
While the $36 trillion home equity market has historically been the exclusive playground of large institutions, Homeshares is changing the game by allowing accredited investors to gain direct exposure to hundreds of owner-occupied homes in top U.S. cities — without the headaches of buying, owning or managing property.
Homeshares’ U.S. home equity fund focuses on houses with substantial equity, using Home Equity Agreements (HEAs) to help homeowners access liquidity without incurring debt or additional interest payments.
With a minimum investment of $25,000, this approach provides a hands-off way to invest in high-quality residential properties with the added benefit of diversification across regional markets.
Even better, Homeshares can offer risk-adjusted target returns ranging from 14% to 17%. This can make for a good low-maintenance alternative to traditional property ownership.
If you’re more interested in the long term earning potential of short-term stays, you can get into this market for a mere $100 minimum. Real estate platform Arrived offers you access to shares of SEC-qualified investments in rental homes and vacation rentals, curated and vetted for their appreciation and income potential.
Backed by world class investors like Jeff Bezos, Arrived makes it easy to fit these properties into your investment portfolio regardless of your income level. Their flexible investment amounts and simplified process allows accredited and non-accredited investors to take advantage of this inflation-hedging asset class without any extra work on your part.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
