T
he housing market is showing signs of shifting in favor of buyers, but renewed economic concerns are holding some back. Home price growth has slowed and mortgage rates have retreated from recent highs. According to Redfin, the median sale price for homes was $375,475 in the four weeks ending February 16, up just 3.7% from a year prior - the smallest increase in nearly five months. Meanwhile, the average 30-year fixed rate mortgage fell to 6.87%, its lowest point of the year and down from January's peak of 7.04%.

    Despite these positives, buyers are still facing significant affordability challenges. Mortgage applications dropped 6.6% last week, and experts predict a decline in home sales data for January. Some buyers may be hesitant due to uncertainty about the broader economy, with concerns over job security and potential trade wars.

    However, there are promising signs in the market that could give buyers more negotiating power. Inventory is growing as more owners list their homes for sale, providing buyers with "a little bit more bargaining power." New home listings hit a two-year high in January, and sellers are cutting asking prices - the typical home now sells for 2% less than its original price.

    Buyers' worries about the economy and job security may be holding them back. Thousands of government workers have been laid off, making those connected to the government nervous about potential changes. The possibility of trade wars and drastic spending cuts could also lead to hesitation. To navigate this market, buyers should try negotiating hard on prices or seek concessions from sellers, such as covering closing costs or agent fees. Alternatively, they may consider new builds, which often offer favorable loan terms like lower rates.