“If I’m a realtor, I don’t know how to keep buyers motivated,” Driscoll told Mortgage Professional America. “They know a house lists for $600,000, and they know the intended price is probably $700,000.”
And while those sellers can take the extra $100,000 to their next house, Driscoll notes that doesn’t help first-time homebuyers looking for their starter home.
“Who it leaves out is first-time homebuyers,” Driscoll said. “They’re sitting there, and if they don’t have deep pockets behind them, they don’t have the capability to manage the difference in that payment. And then, if it doesn’t appraise out at that higher price, there’s a lot of risk there.”
Homebuyers start to stretch and settle
Not only are potential homebuyers challenged by affordability in the housing market, but they are also faced with affordability issues in their day-to-day lives. The market volatility caused by tariffs isn’t helping either. Due to affordability challenges and risks of higher costs ahead, people are opting to remain in the rental market rather than searching for a new home.
Melissa Cohn of William Raveis Mortgage says mortgage buyers are in limbo as tariffs and rate uncertainty cloud the market. With Fed cuts likely delayed, the second half of 2025 may fall short of expectationshttps://t.co/rLNYRvwp5F
— Mortgage Professional America Magazine (@MPAMagazineUS) May 8, 2025
“Because there’s no housing, rental pricing has gone up as fast as housing prices have gone up,” Driscoll said. “People are trying to figure out how to stretch dollars at the same time, paying bills. It’s not like they’re sitting here saying, ‘Let me rent. Step back and save some money.’ No, it’s because grocery costs are up. Heating and gas bills for the winter were extraordinarily high.