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

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Home prices will increase
Home prices will increase © iStock

Home prices will increase

As a symptom of the inventory shortage, home prices are predicted to continue moving higher.

"I hope the home price growth moderates because some of the price growth has been quite sharp -- near double-digit rates of appreciation," Yun says. He predicts annualized price growth of 3% to 5% toward the end of this year and into 2016.

Prices were up 4.7% year over year from July 2014 to July 2015, according to the latest Standard & Poor's/Case-Shiller home-price index. Separate data from the Federal Housing Finance Agency show a 5.8% year-over-year increase for the same period.

"Mortgage rates may cut you a break, but prices don't seem to be," Richardson says.


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