6 leading real estate economists and professionals regarding what to expect from the housing market this coming winter

Some aspiring home buyers are in for some much needed relief. "Right now may seem more attractive to some buyers because the housing market has cooled recently. Prices are falling in many areas, the supply of houses is increasing, sellers are offering more discounts and mortgage interest rates are falling," says Jacob Arutz, senior economist at LendingTree.
But there is no doubt, after rapid escalations in apartment prices and mortgage interest rates in the past two years (although both have weakened recently), many buyers are wary of the expected. So we asked economists and real estate professionals their predictions for the housing market this winter.

Prediction 1: Mortgage rates will "continue their downward journey"

"With the Fed's move to a smaller rate hike in February, mortgage rates will continue their downward journey and a lower mortgage rate improves affordability, bringing more buyers back into the market," says Nadia Avangelo, senior economist and director of real estate research at the National Association of Realtors. (NAR).
For its part, the channel also says that lower rates may bring back at least some shoppers. "There may be more demand from buyers assuming rates continue to fall, or at the very least don't start climbing again, but it doesn't seem very likely that demand will rise dramatically back to where it was at the beginning of last year. Overall, it is likely that February's housing market will remain friendlier to buyers than just a few months ago," says the channel.
Kate Wood, a home expert at NerdWallet, offers a similar sentiment: "Buyers may be more motivated if rates appear to be stabilizing, and those priced out when prices rose quickly last fall may be willing to give a home purchase another shot."

Prediction 2: Home price increases will slow down even more

Realtor.com data shows that growth in median asking prices for homes nationwide slipped back into single digits in December for the first time in 12 months and nearly held that pace through January.
"The milestone of single-digit price growth is really a continuation of the moderation that began in the summer when prices grew at a rate of 18% year over year," says Danielle Hale, Chief Economist at Realtor.com. The report reveals that the median price of homes for sale rose 8.1% annually in January, which is slightly less than December's growth rate, with the national median list price holding steady at $400,000 in January, down from a record high of $449,000 in June.
Expect even slower growth this month, Avangelo says. "The increases in apartment prices will slow down even more in February. "Mortgage interest rates are finally coming down, which makes affordability much easier, but many buyers continue to be priced out of the market, especially first-time buyers," says Avangelo.
However, price changes will vary between markets. "Markets with the biggest imbalance between supply and demand will see more softness in prices, while for most others it's more of a lift in prices," says Greg McBride, chief financial analyst at Bankrate.

Prediction 3: Buyers have more room to negotiate

Hale says: “It won't be all frustration for buyers. An increase in the number of houses for sale may not mean a decrease in apartment prices, but it allows buyers to regain a measure of negotiating power, and together with a longer time on the market compared to a year ago, buyers are more likely to see houses with a list price that has been lowered below the original asking price." Hale says.

Prediction 4: The market is on a slow path to normality

"The housing market continues to return to a more normal-looking market after the madness of the pandemic. We are far from out of the woods with the affordability crisis that has weighed heavily on home sales, but we are starting to see some green options increase as mortgage rates and interest rates drop. This drop in mortgage interest rates has begun to attract renewed interest from buyers and sales are climbing again compared to last year, but demand remains much lower than the last two years," says Nicole Basho, senior economist at Zillow.