Speaking at NAR’s annual conference in Houston, NAR NXT, The REALTOR® Experience, Yun said he expects mortgage rates to ease to around 6% for the year, employment to increase, and the market to stabilize.  

Steady demand and persistent supply shortages will push home prices 4% higher on an annual basis, Yun added. 

“Next year is really the year that we will see a measurable increase in sales,” Yun said. “Home prices nationwide are in no danger of declining.” 

The U.S. Federal Reserve has cut the Federal Funds Rate twice this fall, and more cuts are expected. Yun noted that while these rate cuts influence mortgage rates, they aren’t the only factor in the cost of borrowing for a home, as broader economic factors also contribute to borrowing costs. 

“As we go into next year, the mortgage rate will be a little bit better,” Yun said. “It’s not going to be a big decline, but it will be a modest decline that will improve affordability.” 

The greatest improvements in affordability will come in markets with high levels of new construction, like Houston, Yun added. 

“Houston is creating more home construction, and therefore making home prices much more reasonable,” said Yun. “Given the job creation, buyers will inevitably be showing up to Houston once the mortgage rate goes down.” 

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