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As home sales cool this fall, what will happen to home prices and interest rates?

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Inventory shortage will continue
Inventory shortage will continue © iStock

Inventory shortage will continue

A relatively small number of homes were for sale this summer, and that trend is likely to persist in the coming months.

"Housing starts are not really picking up at all other than apartments, and therefore I think we will continue to have, generally speaking, tighter inventory than normal," Yun says.

There were 2.29 million, or 5.2 months' worth, of existing homes for sale at the end of August, according to the most recent data available from the NAR. That's 1.7% below the August 2014 inventory of homes for sale.

Then there is the separate category of newly built homes that have never been occupied. The seasonally adjusted estimate of new homes for sale at the end of August was 216,000, which is 4.7 months' worth of housing inventory, according to a joint release from the U.S. Census Bureau and the Department of Housing and Urban Development. That was about 4.7 months' worth of new homes for sale -- roughly 3 weeks shorter than the new-home supply a year earlier.

"Because there's not a lot on the market, it causes all kinds of other things like higher prices, bidding wars (and) price escalation," which leads to buyer fatigue, Richardson says.

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