The National Association of REALTORS (NAR) reported in late October that recent problems within the mortgage markets are improving and expected to ease demand. Once demand begins to move, home sales will begin to rise again and prices will slowly edge back up. Overall, September saw the national market for existing homes fall by 8%. Although the home sales fell, third quarter sales were better than forecasted with a 5.42 million annual rate versus the 5.38 million previously forecasted by NAR.

Lawrence Yun, NAR senior economist, said the decline is understandable. "Mortgage problems were peaking back in August when many of the September closings were being negotiated, and that slowed sales notably in higher priced areas that rely more on jumbo loans," he said. "The good news is that mortgage availability has markedly improved in recent weeks with interest rates on jumbo loans falling, and more people are applying for safer and conforming FHA mortgage products. Some of the cancelled transactions will move forward as buyers apply for other loans."

According to Freddie Mac, the national average 30-year fixed rate loan averaged 6.38 percent through September. Higher home inventories and lower interest rates combine to make this a great buyers market!