The housing market shifts in pricing and evolving expectations are reshaping what and how Americans are choosing to buy. Yahoo Finance is Claire Boston joins us here to discuss. So maybe a little bit of good news for a potential home buyer like myself. We heard that home price appreciation slowed in the US. Walk us through it.

Yes, so we got new data this morning. Home price appreciation in February is now less than 1% year over year. So prices are still up, but not by very much, which is good news if you're trying to buy. Um we're also seeing prices fall in more metros than they're rising. So Denver's a real leader in this. Denver prices down 2.2%. Also places like Tampa, Dallas. The issue though, I know you're looking in New York. New York is still a red hot market. Prices are up over 4%.

Over 4%. Oh no, Claire, this is the very. Oh my god. It's so so regional. Oh wow. So what's behind those moves though maybe in a in a Denver or other areas?

Yeah, so what we're really seeing right now is this bifurcated market depending on are these places where people want to move? And also are builders building homes? And in places like Denver and Tampa, you know, movement has slowed and also there are a ton of home builders adding inventory. And so there's basically a supply and demand mismatch, whereas in New York, uh we don't really build homes here. And as a result, uh home prices are still climbing unfortunately.

Yeah, I've been seeing that a lot. I mean, there's also this chatter about do you buy a home and maybe renovate it or are you looking to just jump in and stay in that home forever? What do you make of that chatter that we're hearing?

Yeah, we're definitely, we're seeing first-time home buyers have to sort of shift their strategies just to get into this market. And so very common. I don't know if you're looking, but fixer uppers are maybe a way to get in for cheaper. And also there used to be this idea of a starter home. So you know, buy what you can and then move up. But prices are just so high these days that I think a lot of people what they're doing is they're like, we're going to save as much as possible. We're going to get into the market and we will stay here until we die.

Yeah, and I also think maybe the thought is that you think that you're going into a starter home then all of a sudden you're like 20 years later you're like, up, I guess we're just going to stay here.

Yeah, you know, you could renovate if you wanted to. there are options.

100%. Yeah, that's actually what I heard from Lo CEO. He was telling me that people are just trying to renovate their homes instead of looking for something else because also, we have mortgage rates still at 6%. What's what are we seeing there?

Yeah, so unfortunately, mortgage rates are even higher than 6%. They're like 6.4%. They're

Which then we saw the reprieve in them earlier this year. So has it been because of this war that

Yeah, yeah. So prices like like right now mortgage rates are coming down a tiny bit, but but above 6% is still really high, especially when you think about prices, um also being high. That being said, there are other options out there. You know, one real chair was telling me that he was thinking, he was seeing more of what we call an arm, which is uh, you know, you can often get a little bit of a lower rate. The catch is is that after a certain amount of time, that rate could go up and reset.

How risky is that though?

Yeah, so, so typically the way that they're done now, they're called like seven-year arms. So they they stay flat for seven years. So the idea is usually if you want to buy a home but you know you might want to move in seven years, you can lock in that lower rate. You know, often times it's below 6% these days. You know, the catch is is that you either have to move or take whatever the market rate is seven years from now.

And it could be say 8% or something.

It could be. There are some limits like it won't go up to like 12. That's not really how these work. But they could go higher. So you are playing a little bit of interest rate risk there.

I do want to go back to this idea of a starter home because BMO had this interesting point. They said that 65% of US home shoppers expect their first home to be their last. When you think about that and you think about the cost of renovations, the cost of of going in on a potential house, it seems like even trying to get a bid, it doesn't always pan out. I'm putting in tons of offers. I'm not getting anything. So how should people be approaching within these sort of markets?

Yeah, I mean, I think it depends a lot on your budget and just what you can afford. Um, you know, that being said, there's not a lot of that starter home inventory anymore. We were talking about builders earlier. Builders tend to build kind of medium-sized homes, they tend to be a little higher margin. And so they're kind of trying to capture what they see is the biggest sector of demand, which is usually not that starter home. And I think that that's why we're seeing people say, okay, maybe I'm going to step this skip the starter home and just try to buy a little bit bigger even if it's more expensive.

So, interesting shifts.

Biggest thing you're looking out for in 2026? Are you optimistic about anything?

You know, I talk all the time with people. I'm like, how is this spring market doing? Is it going to be better? We have been so dead for three years now. And you know, I think even though rates are high, we are starting to see just some green shoots out there, inventory is improving a little bit. It seems like you know, more sellers are coming and listing. So we we could be headed for a better place what we

All right, I saw some listings pop up while we're on air. I'll I'll catch you later on them. I'll let you know. Thanks so much, Claire. appreciate your time.