Housing market predictions for the fall

Experts share their predictions of what to expect this fall in the housing market.

Experts share their predictions of what to expect this fall in the housing market.

Climate risk is becoming *** factor in home purchasing decisions. 83% of prospective home buyers consider quote at least one climate risk when looking for *** house. According to *** new study, the Zillow study found that *** majority of today's buyers are millennial and gen z shoppers and they are more likely than other generations to consider *** climate risk when deciding where to buy *** home. *** Zillow senior population scientist said quote, while all generations juggle trade offs, budget floor plans and commute times younger home shoppers are more likely to face another consideration. They want to know if their home will be safe from rising waters, extreme temperatures and wildfires. The study found that the region where prospective buyers are most considerate about such risk is the west where 90% of those surveyed reported they consider it. The data comes from Zillow's consumer housing trends report which surveyed nearly 12,000 prospective home buyers between April and July.

Updated: 8:01 AM CDT Sep 15, 2023

Editorial Standards ⓘ

Housing market predictions for the fall

Experts share their predictions of what to expect this fall in the housing market.

Updated: 8:01 AM CDT Sep 15, 2023

Editorial Standards ⓘ

PHNjcmlwdCB0eXBlPSJ0ZXh0L2phdmFzY3JpcHQiIHNyYz1odHRwczovL3N0YXRpYy5teWZpbmFuY2UuY29tL3dpZGdldC9teUZpbmFuY2Vfdmlld3BvcnRfZGV0ZWN0aW9uLmpzPjwvc2NyaXB0PjxzY3JpcHQgYXN5bmMgdHlwZT0idGV4dC9qYXZhc2NyaXB0Ij5teWZpV2F0Y2hXaWRnZXQoJ215ZmlXaWRnZXRfMTUnKTtteWZpV2F0Y2hXaWRnZXQoJ215ZmlXaWRnZXRfOCcpO215ZmlXYXRjaFdpZGdldCgnbXlmaVdpZGdldF85Jyk7PC9zY3JpcHQ+Aly J. Yale is a contributing writer for Hearst, focusing largely on housing, real estate, and mortgages. She loves demystifying these sometimes complex topics and helping consumers make informed decisions about their finances. In her 15 years as a professional writer and editor, her work has been published in Forbes, Buy Side from the Wall Street Journal, Business Insider, Money, CBS News, US News & World Report, Fortune, and The Miami Herald. She has a bachelor’s degree in radio-TV-film and news-editorial journalism from the Bob Schieffer College of Communication at Texas Christian University and is a member of the National Association of Real Estate Editors. She lives by her reward-earning credit card and is holding onto her 2.75% mortgage rate for dear life.Hearst Television participates in various affiliate marketing programs, which means we may get paid commissions on editorially chosen products purchased through our links to retailer sites. This may influence which products we write about and where those products appear on the site, but it does not affect our recommendations or advice, which are grounded in research.Mobile app users, click here for the best viewing experience.With Labor Day behind us, in just a few short weeks it will officially be fall.Typically that means things slow down in the real estate market. Demand wanes as the kids settle in at school, and sales, prices and bidding wars all start to drop.Is that something we can expect as we head into autumn? Here’s what the pros — and data — have to say about this fall’s housing market.Mortgage rate predictions Mortgage rates have been trending upward since early last year, and just last week, they reached their highest point in over 20 years — a whopping 7.09% on the average 30-year fixed-rate loan.Fortunately, most experts don’t expect things to continue on that trajectory. This is because the Federal Reserve is expected to stop increasing its benchmark interest rate within the next few months — a big influence in the higher mortgage rates of late. “A pause by the Fed should prevent further creep,” says Budge Huskey, CEO and president at Premier Sotheby’s International Realty. Still, he says, “It’s anticipated will remain in the 6% range through the rest of the year.”According to Realtor.com, the rates could in fact get all the way down to 6% by year’s end. Fannie Mae predicts an average 6.7% rate by that time, while the Mortgage Bankers Association expects 6.2%.Supply and demandThe supply of for-sale housing is incredibly low. In fact, according to real estate brokerage Redfin, total inventory was an all-time low in June, dropping 15% compared to just one year earlier. Because of this meager supply, existing home sales fell by about 2% in July, according to Realtor.com. New home sales, on the other hand, were up 4.4% for the month and a whopping 31.5% over the year. Amit Arora, vice president of investments for Opendoor, expects this trend to continue into the fall.“Prospective homebuyers are turning to new construction as a way around low inventory,” Arora says. “Builder confidence for newly-built single-family homes rose in July 2023, so we can expect more buyers to leverage builder incentives. The supply chain continues to be a challenge, but builders are seeing it somewhat normalizing in most markets and believe that it will likely remain as such through 2023.”While new home construction is actually on the rise, the supply of existing homes likely won’t improve for some time — and that comes back to mortgage rates. According to Zillow, 80% of homeowners have a mortgage rate under 5%. Few are willing to trade those low rates for today’s much-higher 7%-plus ones.As a result, Realtor.com predicts sales will continue to decline throughout the year, notching total sales of about 4.2 million across 2023 — a 16% decline compared to 2022 and the smallest annual total since 2012. “It’s commonly believed that far more sales would be possible if inventory levels were closer to what is considered normal,” Huskey says. Where will home prices go?Low inventory also plays a role in home prices. With so few homes for sale, buyers must compete, which drives up pricing and keeps the housing market afloat. Because of this — and the lack of inventory, which is expected to persist for some time, most pros expect home prices to moderate or drop only slightly by year’s end.“We experienced an unprecedented boom in home values in 2021, and the cooling of this gave many fears that we were headed for a crash,” says Maureen McDermut, a real estate agent at Sotheby’s International Realty. “However, this turned out to be unfounded.”Realtor.com expects overall home prices to fall 0.6% by the end of 2023 (compared to one year ago). Fannie Mae predicts a 3.9% increase over the year. These are just national estimates, though, and home price trends tend to vary widely from one location to the next. In some markets with high levels of demand and low inventory (a seller’s market), prices could rise more. In others, where inventory is in or demand is particularly low (a buyer’s market), prices could fall.As Huskey puts it, “There are areas where price reductions and greater negotiations are common, and others where quality listings are receiving multiple offers — still reaching beyond list price.”The bottom lineThings are slowing down in the housing market as we head into fall, but that doesn’t mean a housing market crash, nor does it mean mortgage rates will go back to the record-low rates of yesteryear.Instead, it likely means a more balanced market — one where affordability improves slightly, at least for next few months. “My advice to home buyers is to not focus on the short-term ups and downs,” Amora says, “especially if they are buying a home they plan to live in for an extended period of time. Instead, evaluate the home based on your needs and budget. If you can afford the monthly payments and it checks all your boxes, there shouldn’t be much else stopping you.”Editorial Disclosure: All articles are prepared by editorial staff and contributors. Opinions expressed therein are solely those of the editorial team and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in this article is accurate as of the date of the publish. Check the lender’s website for the most current information.This article was originally published on SFGate.com and reviewed by Lauren Williamson, who serves as Financial and Home Services Editor for the Hearst E-Commerce team. Email her at lauren.williamson@hearst.com.

Aly J. Yale is a contributing writer for Hearst, focusing largely on housing, real estate, and mortgages. She loves demystifying these sometimes complex topics and helping consumers make informed decisions about their finances. In her 15 years as a professional writer and editor, her work has been published in Forbes, Buy Side from the Wall Street Journal, Business Insider, Money, CBS News, US News & World Report, Fortune, and The Miami Herald. She has a bachelor’s degree in radio-TV-film and news-editorial journalism from the Bob Schieffer College of Communication at Texas Christian University and is a member of the National Association of Real Estate Editors. She lives by her reward-earning credit card and is holding onto her 2.75% mortgage rate for dear life.

Hearst Television participates in various affiliate marketing programs, which means we may get paid commissions on editorially chosen products purchased through our links to retailer sites. This may influence which products we write about and where those products appear on the site, but it does not affect our recommendations or advice, which are grounded in research.

Mobile app users, click here for the best viewing experience.

With Labor Day behind us, in just a few short weeks it will officially be fall.

Typically that means things slow down in the real estate market. Demand wanes as the kids settle in at school, and sales, prices and bidding wars all start to drop.

Is that something we can expect as we head into autumn? Here’s what the pros — and data — have to say about this fall’s .

Mortgage rate predictions

have been trending upward since early last year, and just last week, they reached their highest point in over 20 years — a whopping 7.09% on the average 30-year fixed-rate loan.

Fortunately, most experts don’t expect things to continue on that trajectory. This is because the Federal Reserve is expected to stop increasing its benchmark interest rate within the next few months — a big influence in the higher mortgage rates of late.

“A pause by the Fed should prevent further creep,” says Budge Huskey, CEO and president at Premier Sotheby’s International Realty. Still, he says, “It’s anticipated [mortgage rates] will remain in the 6% range through the rest of the year.”

According to Realtor.com, the rates could in fact get all the way down to 6% by year’s end. Fannie Mae predicts an average 6.7% rate by that time, while the Mortgage Bankers Association expects 6.2%.

Supply and demand

The supply of for-sale housing is incredibly low. In fact, according to real estate brokerage Redfin, total inventory was an all-time low in June, dropping 15% compared to just one year earlier.

Because of this meager supply, existing home sales fell by about 2% in July, according to Realtor.com. New home sales, on the other hand, were up 4.4% for the month and a whopping 31.5% over the year. Amit Arora, vice president of investments for Opendoor, expects this trend to continue into the fall.

“Prospective homebuyers are turning to new construction as a way around low inventory,” Arora says. “Builder confidence for newly-built single-family homes rose in July 2023, so we can expect more buyers to leverage builder incentives. The supply chain continues to be a challenge, but builders are seeing it somewhat normalizing in most markets and believe that it will likely remain as such through 2023.”

While is actually on the rise, the supply of existing homes likely won’t improve for some time — and that comes back to mortgage rates. According to Zillow, 80% of homeowners have a mortgage rate under 5%. Few are willing to trade those low rates for today’s much-higher 7%-plus ones.

As a result, Realtor.com predicts sales will continue to decline throughout the year, notching total sales of about 4.2 million across 2023 — a 16% decline compared to 2022 and the smallest annual total since 2012.

“It’s commonly believed that far more sales would be possible if inventory levels were closer to what is considered normal,” Huskey says.

Where will home prices go?

Low inventory also plays a role in home prices. With so few homes for sale, buyers must compete, which drives up pricing and keeps the afloat.

Because of this — and the lack of inventory, which is expected to persist for some time, most pros expect home prices to moderate or drop only slightly by year’s end.

“We experienced an unprecedented boom in home values in 2021, and the cooling of this gave many fears that we were headed for a ,” says Maureen McDermut, a real estate agent at Sotheby’s International Realty. “However, this turned out to be unfounded.”

Realtor.com expects overall home prices to fall 0.6% by the end of 2023 (compared to one year ago). Fannie Mae predicts a 3.9% increase over the year.

These are just national estimates, though, and home price trends tend to vary widely from one location to the next. In some markets with high levels of demand and low inventory (a seller’s market), prices could rise more. In others, where inventory is in or demand is particularly low (a buyer’s market), prices could fall.

As Huskey puts it, “There are areas where price reductions and greater negotiations are common, and others where quality listings are receiving multiple offers — still reaching beyond list price.”

The bottom line

Things are slowing down in the as we head into fall, but that doesn’t mean a , nor does it mean mortgage rates will go back to the record-low rates of yesteryear.

Instead, it likely means a more balanced market — one where affordability improves slightly, at least for next few months.

“My advice to home buyers is to not focus on the short-term ups and downs,” Amora says, “especially if they are buying a home they plan to live in for an extended period of time. Instead, evaluate the home based on your needs and budget. If you can afford the monthly payments and it checks all your boxes, there shouldn’t be much else stopping you.”

Editorial Disclosure: All articles are prepared by editorial staff and contributors. Opinions expressed therein are solely those of the editorial team and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in this article is accurate as of the date of the publish. Check the lender’s website for the most current information.

This article was originally published on and reviewed by Lauren Williamson, who serves as Financial and Home Services Editor for the Hearst E-Commerce team. Email her at lauren.williamson@hearst.com.

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