Vacationers aren’t the only ones feeling the heat this summer—many homebuyers are also sweating as they strive to afford a home. According to the latest data from the National Association of Realtors, the median price for existing homes has reached a record high of $419,300, with little indication that prices or mortgage rates will decrease anytime soon.

What housing market trends can buyers and sellers expect in the coming three months? Here are the latest predictions from industry experts.

Q3 2024 housing market trends: What to expect

Typically, the third quarter marks the end of the peak real estate season that spans spring and summer.

“Home supplies generally increase during the busy summer months, as it’s a popular time for families to search for new homes before the school year begins,” says Rob Barber, CEO of the real estate data firm ATTOM. “During this period of heightened demand, home prices also tend to rise.”

Dennis Shirshikov, an adjunct professor of economics at City University of New York, points out that this increased demand can complicate an already challenging market: “Housing supply tightens, resulting in more competition among buyers.”

However, some experts believe that Q3 of 2024 may not follow traditional patterns. Rick Sharga, president and CEO of CJ Patrick Company, notes that since the COVID-19 pandemic, seasonal trends have shifted. “Historically, home sales peak in the second and third quarters before declining in winter, but we’ve seen peaks occurring in January or February, with a decline for the rest of the year,” he explains. “This trend seems to be repeating in 2024, with sales volume peaking in February.”

As it stands, high mortgage rates and record home prices present significant challenges for potential buyers. Barber suggests that this summer may see smaller increases in home prices and sales compared to previous years.

Where home prices are heading

Home prices generally rise during the peak season, and with inventory still relatively low, there’s little chance of significant drops this quarter.

“According to CoreLogic data, prices are expected to increase by 5.9 percent year-over-year and by 1.5 percent from the previous quarter,” says Boesel. “I anticipate that homes will continue to sell quickly, but with limited inventory, sales may only rise by about 5 percent in the third quarter compared to last year.”

However, Sharga points out an interesting trend amid recent market volatility: “Altos Research reports that nearly 35 percent of listed properties have seen price reductions, which is unusually high for this time of year,” he notes. “While this doesn’t necessarily indicate a nationwide price drop, it may suggest that prices are beginning to stabilize.”

Housing inventory predictions for Q3

Don’t expect a significant increase in home supply between July and September. Experts agree that inventory is likely to remain far below what’s needed.

“The good news is that supply has risen about 35 percent from 2023 levels,” Sharga says. “However, it’s still under a three-month supply nationwide, which is half of what’s considered balanced between buyers and sellers. Entry-level inventory is particularly limited, creating fierce competition among buyers and investors for these scarce homes.”

Homeowners who purchased during the low mortgage rate era have little motivation to sell and then face higher rates when buying again. “Nearly 40 million purchase loans were issued during this period of low rates, according to ATTOM data, meaning tens of millions of owners are in a favorable position,” Barber explains. “This situation helps clarify why, according to the St. Louis Fed, the number of homes for sale is down about 50 percent from five years ago. While new home construction addresses some of this demand, it likely won’t be sufficient to bridge the gap.”

Strategies for homebuyers and sellers

If you’re looking to buy a home, stay hopeful but be realistic about prices, rates, and competition this quarter.

“Be patient and strategic,” advises Shirshikov. “With mortgage rates expected to be higher, it’s essential to shop around for the best deals and consider locking in a favorable rate when you find one. Focus on properties that have been on the market for a while, as sellers may be more open to negotiation.”

It’s also important to assess your personal finances: “If you have a solid down payment and enough savings to cover maintenance, utilities, insurance, furniture, and other homeownership costs—and plan to stay put for a while—then it might be a good time to buy,” Rossman suggests. “Just be careful not to stretch your finances too thin. A potential silver lining is that you could refinance in a year or two if rates drop.”

For sellers, timing is crucial. “The third quarter marks the end of the peak season for many sales and prices,” Boesel points out. “As the year progresses, you may experience longer selling times and lower prices compared to summer.”

If you’re planning to sell soon, also consider your next move and the associated costs. “While it’s tempting to sell your home for a significantly higher price than you paid, keep in mind that your next purchase is likely to have increased in price as well,” Rossman warns. “The best scenario might be downsizing or relocating to a less expensive area. However, if you’re staying in the same location and moving to a pricier home with a higher mortgage rate, be aware that it may be more challenging to afford.”