With headlines about falling home prices and economic uncertainty, many buyers are sitting on the sidelines. While it’s understandable to be cautious, these shifts could actually create an opportunity for long-term buyers.

Buyers who plan to stay in their homes for at least 5 years or more can take advantage of today’s market conditions, which may offer significant benefits in the long run. Rather than focusing on short-term market fluctuations, now is a great time for strategic, long-term buyers to make a smart investment in real estate.

Market Adjustments: A Recalibration, Not a Crash

Recent headlines have highlighted declining home prices across various metros, causing some potential buyers to panic. According to a Redfin report, 11 of the 50 largest metros have seen year-over-year price declines, including areas like San Antonio (-3.7%), Austin (-1.3%), and Oakland. However, these are not universal trends.

Comparing this to Home Price Index (HPI) data from larger data aggregators like FHFA and S&P/Case-Shiller, the overall national appreciation is slowing, not depreciating. The Case-Shiller Home Price Index reports a 3.9% year-over-year appreciation, down from the record-breaking increases seen during the pandemic years.

Although some buyers may want to sit-out the market over fear of a crash, historical data shows current conditions don’t match that scenario. While we are still experiencing national appreciation now, the S&P/Case-Shiller Home Price Index reported an 18.2% year-over-year decline in the national home price in 2008.

This market shift is better described as a market recalibration rather than a bust.

Long-Term Ownership: A Path to Wealth

Even in a softening market, homeownership can remain a powerful financial tool. Buyers who purchase with a long-term outlook will be shielded from the uncertainty of short-term market fluctuations. Staying in the home for at least five years could position buyers for financial success down the road.

According to a report in December of 2024, the average approximate net worth of homeowners is over $400,000, compared to just $10,000 for renters. Homeownership can not only act as a hedge against inflation but also an opportunity to accumulate equity. Even in markets that are adjusting, buying a home could remain one of the most effective ways to grow wealth over time.

Additionally, homeowners are protected from rising rents. As of March 2025, the average asking rent increase has been 3.5% year-over-year, homeowners are shielded from these fluctuations because their monthly principal and interest payments are fixed.

Affordability and Negotiation Opportunities

With home prices softening in certain areas, buyers may now find themselves in a better position to negotiate. For example, the NAR reports in some markets, seller concessions are increasing. Nationwide, 44% of homes are offering seller concessions.

Plus, with interest rates showing signs of stabilization, buyers can better assess affordability. The combination of softer home prices and increased negotiating power offers significant advantages for those looking to buy a home.

Strategies for Buyers in This Market

For buyers, now is the time to focus on affordability, strategic negotiation, and financial stability. Buyers who plan on staying in their homes for several years could take advantage of the current market.

1. Plan for a Longer Timeframe: Short-term buyers may face more uncertainty in the market, but long-term buyers have the opportunity to weather market fluctuations and benefit from future appreciation.
2. Focus on Affordability: Understand the monthly payment that fits your budget, including the total cash to close. It’s important to be financially prepared to avoid getting “house poor” and ensure you can maintain your home over time.
3. Negotiation is Back on the Table: In a softening market, buyers have more leverage. Look for opportunities to negotiate, such as seeking out seller concessions and rate buy-downs to lower your costs upfront.
4. Understand Market Conditions: While home prices have softened in some areas, overall market appreciation is still occurring. Instead of trying to time the market perfectly, focus on the long-term picture and building equity over time.

In a market where home prices are slowing, long-term homeownership remains a strong financial move. Buyers who plan to stay for 5-7 years can benefit from affordable prices, increased negotiating power, and the opportunity to build wealth over time. Now is a great time to make a strategic move into homeownership.