Where we stand now
The U.S. housing market has softened recently. Home price growth is essentially flat in many markets, with some metro areas even seeing modest declines. Zillow projects a –1.7 % decline in U.S. home prices from March 2025 to March 2026. Meanwhile, inventory is rising — active listings have climbed closer to or even above pre-pandemic levels in many locales. At the same time, mortgage rates have eased slightly from their peaks, giving buyers more breathing room.
In short: after years of a sellers’ market, conditions are tilting toward a buyers’ market in many regions. But that doesn’t mean it’s uniformly favorable everywhere — local dynamics still matter a lot.
If you already own, you may be wondering whether to refinance. If you rent, you may be thinking: is now the time to buy? Below — some of the key considerations.
For Homeowners: Is It Worth Refinancing?
Refinancing means replacing your current mortgage with a new loan (ideally at a lower rate or different term). The goal is often to reduce monthly payments, shorten the loan term, or extract equity.
Here’s what to evaluate:
1. How much lower is the new rate (or how much better the terms)?
If current mortgage rates are meaningfully lower than the rate on your existing mortgage, the interest savings can justify the cost of refinancing. But “meaningfully lower” really depends on how many years you have left on your loan and how long you expect to stay in the home.
2. Refinancing costs and break-even horizon
You can expect to face many of the same closing costs you faced originally — appraisal, title, origination fees, etc. These might run between 2 % to 3 % of the loan amount (or in absolute dollars, perhaps several thousand dollars). (As one homeowner forum puts it, “It usually costs around $2.5k–$3k to refinance rate and term.”)
You’ll want to compare that cost against your projected interest savings to compute a break-even period (e.g. 3–7 years). If you’re not certain you’ll stay in the home beyond that break-even point, refinancing may not make sense.
3. Term and cash flow trade-offs
Switching from a 30-year to a 15-year mortgage lowers total interest paid, but raises the monthly payment. If you opt for a lower rate but keep a longer term, you may see only modest savings unless rates declined substantially.
4. Credit, equity, and qualification
To qualify for the best refinancing rates, you usually need good credit, sufficient equity in the home, and stable income. If your credit score is weak or your home’s value has dropped, the rates you’re offered might not be compelling.
5. Risks and “rate lock”
Rates could move after you lock in a refi offer, so you’ll want to consider float-down options (if available) or timing. Also, if home values weaken further, you might risk being “underwater.”
Bottom line for homeowners: If your current rate is significantly higher than prevailing rates, and if you plan to stay in your home long enough to recoup closing costs, refinancing may be a smart move. But the details matter. Always run scenarios (sensitivity to staying time, remaining loan life) before pulling the trigger.
For Renters: Is Now the Time to Buy?
With conditions shifting in favor of buyers, some renters may be wondering if it’s wise to transition to home ownership now. Here are key factors to weigh.
Pros of buying in a buyers’ market
- Negotiating power — More inventory and less competition gives buyers more leverage: sellers may be willing to drop price, offer credits for repairs, or cover closing costs.
- Locking in a fixed payment — If you get a fixed-rate mortgage, your principal + interest won’t rise (unlike rent). That brings predictability.
- Building equity over time — Each payment increases your stake in the property (assuming values don’t decline sharply).
- Potential tax benefits — Mortgage interest, property taxes (subject to caps), and other deductions may tilt the economics in your favor.
- Forced savings and inflation hedge — Homeownership acts as a forced savings vehicle; real assets may hold up better in inflationary settings.
Cons and risks of buying now
- High borrowing costs — Even though rates have eased, they remain elevated relative to historical lows, meaning mortgage costs are still steep.
- Large upfront costs — Down payment, closing costs, inspections, moving, and possible immediate repairs all hit your cash flow.
- Lack of flexibility — If you anticipate job changes or relocating, owning can become a burden if the market softens.
- Maintenance, property taxes, insurance — These ongoing costs are often underestimated.
- Price risk — Some forecasts project mild home price declines in 2025. For instance, Zillow’s model anticipates a –1.7 % drop over the coming year. In markets already softening heavily, you could lose upside or even principal if values slip further.
When renting might still win
Recent data suggest that in many large metros, renting is now more affordable than buying, once you include mortgage, taxes, insurance, and maintenance. Bankrate’s 2025 study found that in all 50 largest metros, average rent remains lower than the full cost of homeownership.
So for renters who don’t yet have large savings, aren’t certain where they want to settle, or whose credit needs improvement, continuing to rent (while saving and observing markets) might be the safer bet.
What to analyze in your own case
- Estimate all in monthly cost of owning vs. renting in your target market
- Run scenarios of mortgage rates you might qualify for
- Assess your expected horizon — how long do you intend to stay in the property?
- Stress-test for income disruption, maintenance surprises, and property value swings
- Factor in non-financial considerations (stability, desire to customize, lifestyle preferences)
In many local markets today, the pendulum is swinging to buyers’ advantage. But that doesn’t mean every buyer “wins.” Local supply, job market, and housing stock all matter.
Final Thoughts
There is so much nuance behind both refinancing and deciding whether to buy. The broad market tilt toward buyers may give some of you an opening — but the right answer depends heavily on your individual circumstances (rate, term, location, plans, financial flexibility).
If you’d like help walking through your unique situation — running scenarios, comparing alternatives, stress-testing assumptions — PFL Consulting (at www.pflwealth.com) is a great place to seek guidance.
Let me know if you want a downloadable worksheet or a customizable calculator we could publish for readers!