The predictive claims of astrology have been tested and haven't held up. That's a settled question and it's addressed elsewhere.
A separate question is what accounts for the practice's usefulness to people who don't hold the predictive claims, and the answer has to do with the structure of the framework rather than with any correspondence to celestial positions.
What a chart provides structurally
A complete set of domains. The houses divide a life into areas — self, resources, communication, home, creativity, work, partnership, transformation, meaning, vocation, community, the unconscious.
Whatever one thinks of the assignment, the list is reasonably comprehensive. Anyone working through it systematically will consider areas of life they'd otherwise skip.
Most self-reflection is unstructured and therefore concentrates on whatever is currently salient. A framework that requires attention to twelve domains produces coverage.
Tensions rather than traits. Charts describe relationships between elements — aspects, in the vocabulary — which are frequently framed as tensions between competing tendencies.
That's structurally different from a personality test producing categories. A framework built around internal conflict maps better onto how people actually experience themselves than one built around fixed types.
No single answer. A chart contains enough elements that it can't be reduced to a summary. Which means engaging with it requires interpretation rather than acceptance, and interpretation is the reflective work.
Externalised material. The chart presents characteristics as coming from outside, which allows them to be considered with less defensiveness than a direct assessment would permit.
Why externalisation helps
This is probably the most significant feature and it has parallels elsewhere.
People are defensive about direct characterisation. Being told you avoid conflict produces resistance; encountering the same observation in a framework attributed to something impersonal produces consideration.
Similar mechanisms appear in other reflective practices. Projective techniques, narrative approaches that externalise a problem, and various card-based reflective tools all work by providing material that isn't presented as a judgement about you.
Whether the material has any independent validity turns out to matter less than whether it prompts genuine thought.
The Barnum problem, honestly
The obvious objection, and it applies.
Chart interpretations contain statements broad enough to fit most people, and the felt accuracy is substantially produced by the reader supplying the fit.
Which is a fatal problem for the predictive claim and less so for the reflective use.
If the value comes from being prompted to think, then a prompt that could apply to many people still prompts you specifically to think about your own case. The Barnum effect explains why it feels accurate; it doesn't explain away the thinking that follows.
The distinction matters: a vague statement is useless as information and can be useful as a question.
What it can't do
Being clear about limits.
It cannot tell you anything about the future, and treating it as though it can leads to decisions made on no basis.
It cannot tell you anything about another person you haven't met, which makes compatibility assessment particularly problematic.
It cannot substitute for professional support where that's needed, and there are documented cases of people delaying appropriate help while pursuing astrological explanation.
And it can entrench self-conception unhelpfully. A framework that supplies an explanation for a trait may reduce the sense that it's changeable, which is the opposite of useful.
The alternatives
Worth noting, since the reflective function doesn't require this particular framework.
Structured journaling prompts provide domain coverage without any metaphysical apparatus.
Values clarification exercises used in some therapeutic approaches cover similar ground with an evidence base attached.
Life review frameworks used in coaching provide the same systematic coverage.
These do the same work, they're less interesting to most people, and interest is what determines whether anybody actually engages.
Which is a real point in favour of the astrological version for the people it appeals to. A framework somebody will use beats a better framework they won't.
The reasonable position
If you find charts useful for thinking about yourself, that's a legitimate use of a symbolic system and the mechanism is ordinary.
If you're making decisions on the basis of predicted events, or assessing people you haven't met, you're relying on claims that have been tested and haven't held.
The distinction is between using a structure to think and treating it as a source of information. Both are common, they get conflated constantly, and only one of them has anything behind it.
The consultation itself
Worth noting that a reading with a practitioner is a different activity from reading a chart yourself, and the difference explains a good deal.
A consultation involves an hour of undivided attention from somebody asking questions about your life. That is a rare experience for most people and it produces effects independent of the framework being used.
Skilled practitioners also read the person — noticing which statements land, following those, and adjusting. That is a genuine interpersonal skill and it is doing substantial work in any reading that feels accurate.
Which is worth knowing when assessing whether a reading was informative. The attention was real; the attribution of the insight to the chart is the part that does not follow.