5 Top Real Estate Market Predictions This Fall and How They Affect Your Pocket

Fall has officially fallen, which means that there is a lot of change in the crisp, autumn air, including for the American real estate market. There are trends to suggest that inventory will continue to rise across most of the United States — for example, the Midwest could see a huge surge in buying and selling.

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“The Fed just cut interest rates, and that’s going to have an impact on mortgage rates,” noted Seamus Nally, CEO of TurboTenant . “Already, mortgage rates are starting to decline. So, this fall, mortgage rates are probably going to look the best they’ve looked in several years. This could make it an ideal time for people to buy.”

Kuba Jewgieniew, CEO and founder of Realty ONE Group , added, “In environments with high inflation and interest rates, homebuyers forced to move due to life circumstances will prioritize affordability. These economic pressures are anticipated to gradually ease, enabling all types of buyers, including investors and second homeowners, to move more quickly on properties later in the year compared to previous years.

Nally added a warning: “When mortgage rates fall, however, demand increases since people want to take advantage of these new rates. This means more competition among buyers, which could possibly drive real estate prices up a bit.”

So which markets are set for a big changeup this season and how could that impact your finances? Here are five top real estate market predictions for this fall and how they might affect your pocketbook.

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Mortgage Rates May Continue To Drop

“We’ve seen mortgage rates hover around 7% for much of 2024, which has made it tough for many potential buyers,” said Don Wede, president of Heartland Funding Inc . “However, there’s talk of the Federal Reserve possibly cutting rates [again] by the end of the year. If this happens, we could see a rush of buyers entering the market, which might lead to more competitive pricing and potential bidding wars.”

Wede advised that if you’re thinking about buying, keep a close eye on this: A drop in rates could make homeownership a bit more affordable.

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Inventory Levels Might Finally Start To Increase

“For a while now, we’ve been stuck in a tight housing inventory situation, which has been frustrating for buyers,” said Wede, who believes there might be more homes hitting the market this fall. “Homeowners who delayed selling due to economic uncertainty might be ready to list their properties as life changes unfold — think job relocations, family dynamics or simply wanting to downsize. More inventory could help ease some of the pressure on prices and give buyers more options.”

Home Prices Likely Will Hold Steady (or Even Increase)

Despite the challenges in the market, home prices remain historically high, according to Wede, who is one of many real estate experts predicting a slight increase in home prices as inventory slowly creeps up.

“While this might sound frustrating, it’s crucial to remember that prices typically hold steady during low-inventory periods, especially if demand continues to outpace supply,” Wede said. “If you’re looking to sell, this could mean favorable conditions for you.”

Commission Structure Changes Could Affect Transactions

“There’s a significant shift coming in how real estate commissions are structured, thanks to a recent lawsuit,” Wede pointed out. “Buyers may now be responsible for their agent’s commission, which could reshape the negotiation dynamics in homebuying.”

Wede noted that this could lead to more buyers feeling empowered to negotiate prices, potentially influencing home values.

“It’s an important change that buyers should consider when planning their purchases,” he said.

It Will Be Competitive Market for Buyers

If you’re a first-time buyer, Wede advised to brace yourself.

“Despite potential increases in inventory, the market is still likely to remain competitive,” he said. “Even with possible drops in mortgage rates, prices are expected to hold strong, which means you’ll need to be prepared to act quickly when you find a property you love.

“It might be wise to connect with a local real estate agent who can guide you through this fast-paced environment.”

If you are wondering whether specific markets are going to feel the flux more than others, you are correct. There are three cities that might feel fall hit the local real estate market more fiercely in the coming weeks:

New York City

The New York City fall market is extremely active with buyers re-entering the market, according to Jared Blumberg, a licensed real estate salesperson and co-founder of the Werner Blumberg Team at Compass New York City.

“I am expecting a large increase in the amount of signed contracts for this fall market compared to last year,” predicted Blumberg, citing how rates are down considerably from where they were a few months ago.

He foresees that they will continue to drop, providing buyers with the ability to afford the type of homes they need and want.

“People are going to try and capitalize on the current market pricing and reduced interest rates before the market moves again,” Blumberg said. “I would imagine a year from now we may be sitting in a market with higher prices. I do not think we will see any dramatic increases, but more healthy and moderate growth.”

San Antonio, Texas

Nally estimates that San Antonio is one city that may see some big shifts this fall.

“Housing prices have decreased pretty steadily over the past year or so, and the overall demand for housing hasn’t been as hot as it was in years prior,” Nally said.

“However, if mortgage rates start to drop, that could certainly put a lot more people back out on the market, bumping demand up. When demand goes up, competition increases, and that could cause housing prices in San Antonio to flip and start increasing again.”

Seattle

Erin Reese, Flyhomes Agent, foresees that Seattle and the Puget Sound region is in store for big price increases.

“Looking at the year-over-year numbers, inventory in August 2024 was up 34.1%, but sales were virtually the same,” Reese said. “This tells us that demand was the same in August 2024 as it was in August 2023. In 2024, though, there was a much larger selection of homes to choose from and therefore 2024 prices must have been lower than 2023 prices, right? Wrong. Not only did prices not drop, they increased by 4.9%.

“If you combine high salaries, limited housing inventory and increased purchase power due to falling mortgage rates, you’ve got a recipe for big price increases in the fall.”

This article originally appeared on GOBankingRates.com : 5 Top Real Estate Market Predictions This Fall and How They Affect Your Pocket