Home buyers are finally seeing the light at the end of the tunnel, but it's going to be painful for owners and sellers alike

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The housing market is in trouble for buyers right now, and while things may stabilize, that just means the pressure is likely to shift from buyers to sellers.

Glenn Kelman, CEO of Redfin

Glenn Kelman, CEO of Redfin, recently made headlines after several interviews in which he said the housing market has hit "rock bottom".

"It's a slow-moving disaster," Kelman told CNBC. "The housing market is just being hit hard because housing affordability is at a four-decade low. Only those who absolutely need to move are moving. I wouldn't call it a perfect scenario, I'd call it a bottom. But that's where we are now, and the only relief is that it won't fall much further. "

While the market may not be getting worse for buyers, sellers have yet to hit bottom after years of rising home values. As a contrast, buyers are poised to move up while sellers are starting to sink.

Kelman warned that high rates could persist through 2024 - a fact supported by recent statements from the Cleveland Federal Reserve - but there are signs that things are starting to improve for at least some people.

Housing construction is picking up at a time of year when it usually slows down. Altos Research recently noticed that the number of new home offers rose 1.8 percent in the last week of September compared to the previous week.

Zillow also noted an increase in offers, the real estate company's senor economist Jeff Tucker wrote, "There are more motivated sellers and total active offers than at any time since last December. "

In addition, more sellers are lowering their prices. According to Redfin, 6.5 percent of U.S. homes for sale declined in price in the four weeks ending Sept. 24, down from 5.8 percent in August.

The numbers are even more impressive, according to Zillow: 9.2% of offers lowered their prices for the week ended Sept.

The increase in housing supply combined with active price reductions is good news for buyers, and several experts are predicting a significant drop in value, including Jeremy Grantham, co-founder and chief strategist at investment firm GMO.

"Home prices are going to come down," Grantham said on "The Compound and Friends" podcast. "30% is a pretty good estimate. "

David Rosenberg, president of Rosenberg Research and former chief economist for North America at Merrill Lynch, told Insider in February that home prices could fall 25 percent from their peak in 2022.

All this good news for buyers is great. But even for some, the bottom may be an illusion.

While they are still buying with higher mortgage interest rates and much higher monthly payments, they are also facing rising insurance rates for many homes because of climate change.

Homeowners with a mortgage typically pay for home insurance as part of their monthly mortgage payment. So not only are mortgage payments rising due to interest rates, but insurance premiums are also rising.

There's good news for some buyers, but it also means things are starting to get worse for sellers, and hitting bottom could be a long time coming for them.

High mortgage interest rates - the highest in 23 years - have hurt buyers, as home ownership is now considered unaffordable in nearly 80 percent of all U.S. counties.

Home prices have remained high this year, thanks to the same interest rates. Homeowners who secured significantly lower rates were reluctant to sell their homes if necessary. That reduced the supply of homes for sale and kept prices rising.

"If you have a mortgage at 3 percent, you're not in a hurry to sell that house and get a mortgage at 7 percent," Richmond Fed President Tom Barkin told the Odd Lots podcast. "It changes the financial formula. And that's why you see a very limited supply of homes for sale. "

So both buyers and sellers are stuck.

Thanks to the continued rise in home values this year, homeowner equity is the highest it has been in 35 years. But that may not last if prices start to fall.

If home prices start to fall, it will not only hurt sellers, but also the value of all homes, which detracts from the property value that owners can expect to enjoy in the future.

And then there are those pesky insurance rates. They can also cause home prices to plummet in many neighborhoods, which in turn hurts both sellers and the properties of people who don't sell homes.

Kelman noted that just because the market has stopped deteriorating doesn't mean it will start improving soon. Any recovery will probably have to wait until the Federal Reserve starts cutting interest rates, which would ease mortgage conditions.

In other words, it would be great to hit bottom now, but most Americans involved in the housing market probably haven't yet.