In recent months, the U.S. housing market has made some gains in inventory. Months of supply — or how long it would take for all homes on the market to sell at the current sales pace — rose from 1.7 months in May to 3.1 months in July. In September, inventory rose 27% from a year earlier according to Realtor.com.

Median U.S. home prices fell on a month-over-month basis in August for a second consecutive month. Still, home prices remain historically high after essentially a decade's worth of appreciation that occurred in the past two and a half years. Home price appreciation, along with surging interest rates on a 30-year fixed rate loan, have challenged home affordability.

Housing market power is shifting away from sellers. Sharply higher interest rates have adversely impacted home purchase demand.

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Excerpts from Scotsman Guide and Mortgage Research Center