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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For many Americans, the dream of owning a home feels increasingly out of reach. Housing affordability is now among the worst it has been in two decades, according to the Federal Reserve Bank of Atlanta. Since 2020, home prices have surged 47 percent, far outpacing wage growth. At the same time, property taxes and insurance costs have climbed higher, piling on additional financial strain. In Fannie Mae's June National Housing Survey, consumer sentiment reflected this frustration, with 71 percent of respondents saying it was a bad time to buy a home.

Rising borrowing costs have only added to the challenge. Mortgage rates remain stuck between 6.75 and 7 percent, with little sign of major relief ahead. For first-time buyers, who lack equity from a current property, the barrier to entry is even more daunting. A recent Bankrate survey found that 81 percent of aspiring buyers considered down payments and closing costs a significant obstacle to homeownership.

Part of the problem is perception. Many prospective buyers still believe they need to put 20 percent down to purchase a home, a belief that often leads them to conclude ownership is impossible. Given that the median home price in May was $422,800, a 20 percent down payment would mean saving more than $84,000. In high-cost markets like California, where median prices are around $900,000, the figure jumps to an overwhelming $180,000. It is little wonder that 20 percent of respondents in Bankrate's survey said they doubted they would ever be able to save enough for a down payment.

The reality, however, is different. The traditional 20 percent benchmark is largely a myth. Data from the National Association of Realtors shows that first-time buyers in recent years typically put down between 6 and 10 percent. Programs through the Federal Housing Administration allow buyers to put down as little as 3.5 percent, and conventional loan products backed by Fannie Mae and Freddie Mac offer options with down payments as low as 3 percent. For qualifying veterans and active-duty service members, VA loans require no down payment at all. These alternatives can dramatically reduce the upfront costs of buying a home, though they do often require mortgage insurance or result in higher monthly payments over time.

In addition to loan programs, down payment assistance can be a powerful resource. Thousands of state, local, nonprofit, and lender-sponsored programs exist to help buyers bridge the financial gap. Assistance can cover minimum down payment requirements, closing costs, or even help reduce monthly payments by lowering interest rates. Some programs are structured as grants that never need to be repaid. Others are designed for particular groups, such as teachers, first responders, or military families.

Awareness of these programs is growing as affordability challenges intensify. Down Payment Resource, a company that tracks more than 2,500 assistance programs nationwide, reported that a recent partnership with Zillow drew more than one million unique visitors checking their eligibility in just one year. Nearly all of them matched with at least one program.

Importantly, these opportunities are not limited to first-time buyers. Around 40 percent of assistance programs extend to repeat buyers, and income restrictions are often higher than many assume, sometimes stretching to 100 or even 120 percent of area median income—or disappearing altogether. Buyers who already have some savings can combine those funds with assistance to improve their loan terms, reduce debt-to-income ratios, and strengthen their overall application.

Research suggests that lack of awareness is a major reason buyers miss out. One study of declined mortgage applications found that roughly one-third could have been approved if the applicants had used available down payment assistance. In other words, many buyers who believe homeownership is out of reach may simply not know about the resources available to them.

While these programs cannot solve all the challenges of today's housing market, they can make the path to homeownership more realistic. For those discouraged by high prices, rising rates, and persistent affordability struggles, exploring these options may provide the key to unlocking their first home purchase.

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During the peak of the pandemic, Atlanta's housing market was red hot, with bidding wars pushing prices higher and homes vanishing from listings in days. Today, that frenzy has cooled. Rising mortgage rates and an influx of new inventory are giving buyers more leverage—not just in Atlanta, but across much of the country.

According to a recent Zillow report, the U.S. housing market is more balanced than it has been in five years. In 28 of the nation's 50 largest metro areas, conditions now favor buyers or are at least neutral. This shift is especially visible in once-booming southern cities such as Austin, Texas, and Tampa, Florida.

One major driver is inventory. In June, there were 1.36 million homes listed for sale—the highest number since November 2019. Still, supply remains about 21 percent below pre-pandemic averages. Despite more listings, affordability remains the largest hurdle. The average 30-year mortgage rate sits at 6.74 percent, while the median price of existing homes hit a record $435,300 in June.

Builders, who ramped up construction during the pandemic housing rush, are now turning to discounts and incentives to lure buyers. D.R. Horton, the nation's largest homebuilder, noted in its latest earnings report that perks like mortgage buydowns and free upgrades are becoming more common, and it expects to offer even more in the months ahead.The increased flexibility is showing up in listing prices: more than one in four homes had a price reduction in June, the highest share for that month since Zillow began tracking the data in 2018.

Agents in the Atlanta metro area say buyers are cautious and deliberate. "I'm definitely seeing a lot of buyers coming out of the woodwork again wanting to see homes," said Tim Hur of Point Honors and Associates, Realtors. "They kind of have an expectation of what they want." That's exactly what Mia Jung and Haley Byun have found. The couple, who began their search a year ago in an Atlanta suburb, say higher interest rates have forced them to lower their budget, but the upside is less competition and more negotiating room. Half of the homes they've toured have had price drops, and they're willing to wait for the right deal.

"It surprised me a little knowing that we have this flexibility and seeing the house prices just continuously go down," Jung said. "So we have the comfort of knowing we can hold out somewhat."

Economists say both buyers and sellers are adjusting to a new normal, where the ultra-low 3 percent mortgage rates of 2020 and 2021 are unlikely to return. While the Federal Reserve has held rates steady in recent months and signaled possible cuts later this year, mortgage rates are still expected to hover around 6 percent into 2026, according to Fannie Mae.

"A price correction is necessary in order to keep housing sales moving in a positive direction," said Orphe Divounguy, a senior economist at Zillow.

Recent data supports that shift: The S&P CoreLogic Case-Shiller Index showed the smallest annual price gain in nearly two years in May, while Redfin reported that prices fell in more than a quarter of the 50 largest metro areas this past week, particularly in Texas and Florida.

For homeowners looking to sell, expectations are shifting. Listing a home as-is is no longer enough. Renovations, upgrades, and polished presentation have become critical. As Hur explained, "Unfortunately, the days of slapping it on the MLS are just gone."

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For the fifth consecutive meeting, the Federal Reserve has decided to leave its benchmark interest rate unchanged. This continued pause follows three rate cuts in late 2024 — half a percentage point in September and a quarter-point each in November and December. The decision has sparked debate, especially with President Trump, who has been vocal about his preference for further rate reductions.

The impact on the housing market remains uncertain. Mortgage rates tumbled ahead of last year's first Fed cut, falling from 8.01 percent in October 2023 to 6.20 percent by September 2024, according to Bankrate. Yet despite the Fed's year-end cuts, mortgage rates climbed again in January 2025, hitting 7 percent. This divergence highlights that the Fed does not directly control mortgage rates. Instead, mortgage markets react to broader economic conditions. "A Fed on hold aligns with our forecast for little change in mortgage rates for the time being," noted Mike Fratantoni, chief economist at the Mortgage Bankers Association.

When inflation peaked in 2022, the central bank aggressively raised rates, sometimes by as much as three-quarters of a point. Those hikes cooled housing activity, slowing sales even as home prices pushed to record highs. Higher borrowing costs have made it more difficult for buyers, while sellers face softer demand. Still, many economists believe mortgage rates could slip even without another Fed cut. Lisa Sturtevant, chief economist at Bright MLS, explains: "A decline in mortgage rates later this summer could give a jolt to the housing market, bringing buyers off the sidelines to take advantage of the dip in rates and expanded inventory."

While Fed policy sets the tone, mortgage rates more closely track the yield on 10-year Treasury notes. This is why rates sometimes move opposite to the Fed's actions. Greg McBride, chief financial analyst at Bankrate, pointed out: "Despite interest rate cuts amounting to a full percentage point by the Federal Reserve in the latter part of 2024, mortgage rates bounded higher. If mortgage rates are going to come down in any meaningful way, inflation needs to resume the downward march to 2 percent."

As of July 30, 2025, the average 30-year mortgage rate stood at 6.75 percent — well below the 8 percent peak in 2023, but still high compared to the historically low levels of 2020–21. Mortgage rates above 6 percent have cooled demand, but prices continue to climb. The National Association of Realtors reported that the nationwide median price for existing homes in June 2025 hit $435,300 — the highest on record. Long-term history suggests rising rates don't stop buyers altogether. Even in the 1980s, when mortgage rates soared to nearly 18 percent, people continued to purchase homes. Today's slowdown appears more like a market correction than a looming crash.

Still, affordability is stretched thin. A $320,000 loan at today's 6.75 percent rate means a monthly payment of $2,076. If rates fall to 6 percent, the same loan would cost $1,919 a month — saving borrowers about $1,800 annually.

Experts say inflation remains the key factor to watch. If inflation keeps easing, mortgage rates are likely to follow. In the meantime, borrowers can take steps to better position themselves:

• Shop around aggressively: Different lenders may offer noticeably different rates and fees.
• Be cautious with ARMs: Adjustable-rate mortgages may look cheaper at first, but the long-term risk of higher payments is significant.
• Tap home equity wisely: For homeowners with low-rate mortgages, a HELOC or home equity loan may make more sense than refinancing into today's higher rates.

The Fed's pause offers stability but not certainty. While mortgage rates may gradually decline if inflation continues its downward path, affordability remains the biggest challenge. For buyers, careful timing and smart loan strategies could make the difference between waiting on the sidelines and stepping into the market.

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Adjustable-Rate Mortgages Make a Comeback

With fixed mortgage rates stuck around the 7 percent mark and home prices hitting new highs, many buyers are turning to adjustable-rate mortgages (ARMs) as a way to make ownership more affordable. These loans, which offer lower initial interest rates than traditional fixed-rate mortgages, are gaining traction among borrowers who want to ease the upfront cost of buying a home.

Why ARMs Are Back in Demand

ARMs start with a fixed interest rate for an introductory period — often three, five, seven, or ten years — before adjusting periodically based on market conditions. That initial lower rate translates into smaller monthly payments, giving buyers more purchasing power.

"Potential homebuyers are finding ways to reduce their monthly payments and view ARMs as more attractive given the widening spread between rates for ARM and fixed-rate loans," explains Joel Kan, deputy chief economist at the Mortgage Bankers Association (MBA).

At the beginning of 2025, ARMs accounted for just 4.7 percent of all mortgage applications. By midyear, that share had jumped to nearly 8 percent.

The Gamble with ARMs

Taking on an ARM is essentially making a bet about the future of mortgage rates. If rates are lower when your fixed period ends, your payments could fall. If they're higher, your monthly bill could increase significantly.

That uncertainty makes ARMs riskier than fixed-rate mortgages. "Mortgage rates are the magic bullet, and we're waiting and waiting until those come down," said Lawrence Yun, chief economist at the National Association of Realtors. Predicting when — or if — that happens is nearly impossible.

Who Benefits Most from ARMs?

An adjustable-rate mortgage can be a smart choice in certain situations:

Short-term homeowners: If you expect to sell within five to ten years, an ARM lets you enjoy lower payments during your time in the house.

Risk-tolerant borrowers: Some buyers are comfortable trading stability for the chance to save money upfront.

Jumbo loan borrowers: ARMs can make high-priced homes more manageable by reducing early payments.

Extra principal payers: If you can make additional payments during the introductory period, you'll reduce your balance faster and minimize exposure to future rate hikes.

The Risks to Watch

Despite their appeal, ARMs aren't for everyone. They typically require at least a 5 percent down payment, compared to 3 percent for some fixed-rate loans. More importantly, lenders now underwrite ARMs based on the highest possible payment you could face, to make sure you can handle future increases.

That's because life doesn't always go according to plan. A job loss, a stalled home sale, or an economic downturn could leave you stuck with higher payments than you expected. For borrowers who value certainty, fixed-rate mortgages remain the safer bet.

Types of ARMs

If you're considering an adjustable-rate loan, here are the most common options:

• 3/1 or 3/6 ARM – Fixed rate for three years, then adjusts annually or semi-annually. Usually comes with the lowest initial rate.
• 5/1 or 5/6 ARM – Fixed rate for five years, then resets annually or semi-annually. The most common ARM structure.
• 7/1 or 7/6 ARM – Seven years of stability before regular adjustments. Balances lower risk with a still-competitive initial rate.
• 10/1 or 10/6 ARM – A full decade of predictable payments before adjustments begin. Introductory rate is slightly higher but still lower than most fixed-rate mortgages.

All ARMs come with rate caps, which limit how much your interest rate (and payment) can increase annually and over the life of the loan.

Adjustable-rate mortgages can be a useful tool in today's housing market, especially for buyers who don't plan to stay in their homes long-term or who want lower payments in the near future. But they come with real risks, and success depends on financial flexibility — and a tolerance for uncertainty.

If you can't stomach the possibility of higher payments down the line, a fixed-rate loan may still be the better path. But for the right borrower, an ARM can open the door to a home that might otherwise be out of reach.

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