Elevated home borrowing costs, to the point that they have reached multi-decade highs, along with low inventories and frothy prices have been high obstacles for potential buyers in 2023. The 30-year fixed rate mortgage has flirted 8% recently while the median home price is $407,000. The St. Louis Federal Reserve tells us that there were currently 737,480 active listings in the U.S. in October. Looking back five years, in October 2019, there were 1,304,194 listings.

But could there be a light at the end of the tunnel?

There are a few signs. With the Federal Reserve most likely done with raising rates and inflation pressures easing, home borrowing costs have already begun to decline, not by a whole lot, but in the right direction. We won't see the ultra-low rates of 3%, but the 30-year fixed could fall to between 6-7% by the 2024 spring buying season, says Lawrence Yun of the National Association of REALTORS®.

HUD/Census Bureau reports that sales of new single family houses in September 2023 rose 12.3% from August and were up 33.9% from September 2022. September Housing Starts, or total new construction of private housing also saw a solid monthly gain as did single-family starts. Eventually, sellers holding out for their price and loathe to take on a higher rate mortgage will have to give in, list dwellings, and move on.

Bottom line: If you are in the market to purchase a home, the best time to buy is when you find a home that fits your budget, is large or small enough to meet your needs.

Source: Mortgage Market Guide