“Enhanced affordability has provided much-needed relief to the housing market, which has experienced limited momentum over the past two years,” Hepp said.
“Rising inventories are providing buyers with more choices while price cuts are now more common in certain local markets. This has slowly shifted negotiating power towards buyers—if they can afford to act. But, with some sellers pulling back and further expected decline in mortgage rates, price pressures could resurge.”
Still, the future remains uncertain. “The housing market remains at a crossroads—where mortgage rates, inventory shifts, local dynamics, and policy decisions converge,” Hepp said.
“Whether demand unlocks further or stalls will depend not just on market and economic fundamentals, but perhaps, most crucially, on consumer sentiment which remains fragile particularly when it comes to job security and financial prospects. Until buyers feel confident in both the market and their own financial footing, many will remain on the sidelines.”
The Cotality report reflects that of ICE Mortgage Monitor, in which affordability hits 2.5-year high. With 30-year mortgage rates averaging 6.26% in mid-September, the monthly principal and interest payment on an average-priced home dropped to $2,148, or 30% of the median US household income.