Americans increasingly expect mortgage rates to fall in year ahead: Fannie Mae

Despite the shift, the majority of respondents remained cautious. Only 28% said it was a good time to buy a home, up from 23% in July, while 72% said it was a bad time. The net share of those who said it was a good time to buy, though improved, remained deeply negative at -44%.

In a recent interview Melissa Cohn, regional vice president at William Raveis Mortgage, said the market had begun to show signs of normalization. Although prices and rates remained somewhat high, the increase in supply has allowed for a more normal homebuying experience.

“Buyers today have the luxury of being able to look at a house, think about it, and look at another house,” Cohn told Mortgage Professional America. “They know that the house that they like, even though they’re not quite sure they want to bid on it, is not going to run away from them. It’s a much healthier market than a market where, if you’d like it, you’ve got 10 minutes. If you don’t buy it, someone else is.”

On the selling side, sentiment softened. The net share of consumers who said it was a good time to sell dropped 4 percentage points to 17%. “Majority of consumers (58%) say it’s a good time to sell, while 41% say it’s a bad time to sell,” the report noted.

Home price expectations also cooled. The net share of consumers who expected prices to rise fell 10 percentage points to 18%. Forty percent anticipated higher prices, while 22% saw prices declining.