With mortgage rates still hovering near multi-decade highs and inflation showing signs of creeping upward again, housing affordability is once more at the forefront of consumer concerns. If these conditions persist, buyer demand could weaken further and home prices might finally start to soften. On the other hand, if the economy steadies and borrowing costs ease, demand could rebound quickly—pushing prices higher again. The question on everyone’s mind this fall is which direction the market will take.

Experts agree that mortgage rates remain the single biggest factor shaping affordability in the near term. Mark Worthington, a branch manager with Churchill Mortgage, explained that a sharp decline in rates could temporarily improve affordability but might also reignite demand and send prices back up. Projections suggest only minor relief: the Mortgage Bankers Association expects the average 30-year fixed mortgage rate to land near 6.7% by the end of the year, while Fannie Mae anticipates a modest dip to 6.4%. Debra Shultz, vice president of lending at CrossCountry Mortgage, noted that the Federal Reserve is unlikely to cut rates until October 2025, meaning stability rather than volatility is the most likely scenario this fall.

That stability could be a welcome development. Real estate advisor Dana Bull of Compass emphasized that steady rates allow both buyers and sellers to make decisions without fear of sudden swings. For many, predictability matters just as much as affordability.

Inventory is another piece of the puzzle. Nationally, for-sale listings have risen nearly 25% year over year, reaching the highest level since before the pandemic. More homes on the market generally lead to greater competition among sellers and potentially better deals for buyers. Yet conditions remain highly localized. In Seattle, bidding wars have already returned, while markets like Dallas still offer buyers plenty of options in the lower price ranges. Mortgage rates will influence this dynamic as well—if they fall, more homeowners with ultra-low existing rates may finally list their properties, freeing up additional supply.

As for prices, most experts expect them to hold steady or decline slightly. The median home price now sits just under $411,000, with forecasts pointing to growth of only 2 to 3% for the year, and possible drops in select regions. Shultz described current prices as “slowing but still high,” while Denver agent Brandi Wolff suggested that a significant dip in rates—below 6%—would likely spark renewed competition and drive prices higher again. If rates remain steady, however, modest price declines could continue into the fall.

For move-up buyers who are both selling and purchasing, the challenges are twofold. Increased inventory and elevated mortgage rates make it harder to attract top dollar for an existing home, even as they provide more favorable buying conditions on the other side of the transaction. Realtor.com data shows that homes are now spending an average of 58 days on the market, a week longer than last year, reflecting slower demand. Sellers who overprice risk being forced into steep reductions later. Wolff stressed the importance of setting realistic expectations from the start to maximize profits and avoid costly corrections.

Buyers looking to navigate the market more affordably this fall have several options. Negotiating concessions from sellers or arranging mortgage rate buydowns with lenders can ease monthly costs. Exploring fixer-uppers or properties that have lingered on the market for over a month may also open the door to discounts. Bull observed that sellers often become more flexible after 30 days without an offer, making it a strategic time for buyers to step in with a compelling proposal.

While forecasts remain uncertain, the consistent advice is to watch mortgage rates closely and stay informed about local trends. For those willing to be flexible and creative, there are still opportunities to find value—even in a market where affordability continues to be stretched thin.

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Mortgage rates have dropped sharply, hitting their lowest level in 10 months, after a disappointing July jobs report rattled financial markets. The average 30-year fixed mortgage rate fell to 6.57% on Monday, down from 6.74% just days earlier, according to Mortgage News Daily. The decline marks nearly a 20-basis-point drop since Friday and gives both homebuyers and homeowners a rare opening in an otherwise challenging housing market.

The sudden shift has sparked questions for many: Is now the right time to buy or refinance, or should they wait to see if rates drop even further? The answer is not simple, especially at a time when the U.S. economy shows signs of slowing and job seekers are struggling more to find work. A recent Bright MLS survey found that many prospective buyers have postponed entering the market due to uncertainty about the broader economy.

Still, lower rates are creating meaningful opportunities. Alex Elezaj, chief strategy officer at United Wholesale Mortgage, noted that falling rates give buyers more purchasing power and allow homeowners to potentially refinance into shorter-term loans. For example, moving from a 30-year to a 15-year mortgage not only accelerates payoff but also cuts down the total interest owed. Homeowners currently paying higher rates may benefit the most. A borrower with a $300,000 loan at 7.5% pays roughly $2,100 per month; refinancing to 6.57% would drop that payment by nearly $200, not including fees and closing costs.

The sharp decline in rates was fueled by investors shifting into U.S. Treasury bonds, which are considered safe during economic uncertainty. This demand pushed yields on the 10-year Treasury note lower, dragging mortgage rates down with them since the two tend to move in tandem. Daryl Fairweather, chief economist at Redfin, said the drop could encourage hesitant buyers to make a move before the end of summer, adding that a household with a $3,000 monthly budget has gained about $20,000 in purchasing power since mortgage rates peaked in May at just over 7%.

Even with this newfound flexibility, affordability challenges remain steep. The median U.S. home price reached an all-time high of $435,300 in June, according to the National Association of Realtors. While the recent dip in mortgage rates softens monthly payments, home prices remain elevated, limiting how far that extra buying power can stretch.

Looking ahead, investors are increasingly betting that the Federal Reserve will cut its benchmark rate at its September meeting. While mortgage rates are not directly tied to the Fed’s decisions, they often reflect broader expectations for inflation and economic growth, moving in step with Treasury yields. Whether rates continue to fall will depend largely on incoming economic data. Chen Zhao, an economist at Redfin, noted that markets had already expected signs of weakness in the jobs report, suggesting further declines may be capped unless additional data confirms deeper economic softness.

For now, the drop in mortgage rates provides a moment of relief in a housing market that has been defined by high costs and limited affordability. Buyers and homeowners willing to act quickly could see meaningful savings, though the future path of rates remains uncertain as the Fed and financial markets await more economic signals in the weeks ahead.

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