US Housing Market Weakens as Mortgage Rates Hit 3 Year High in October 2024 cover art

US Housing Market Weakens as Mortgage Rates Hit 3 Year High in October 2024

US Housing Market Weakens as Mortgage Rates Hit 3 Year High in October 2024

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The US housing market has weakened sharply in the past 48 hours as borrowing costs reach their highest level in nearly three years. The average 30 year mortgage rate held near 7.5 percent in the week ending October 9, while purchase mortgage applications fell 4 percent for a sixth consecutive week and were down 16 percent from a year earlier.[5][10] The latest data show a market increasingly divided between cautious buyers and sellers who are becoming more flexible. Existing home sales rose 1.5 percent in September to an annual rate of 3.99 million, but remained 2.2 percent below last year. Because many September closings reflected contracts signed before the latest rate surge, analysts expect fourth quarter sales to weaken further.[2][3] Demand is deteriorating faster than prices. Redfin reported that pending sales dropped 4 percent in September to their lowest level since 2014, excluding the pandemic shutdown. A record 14.5 percent of signed deals were canceled, while nearly one fifth of active listings had their asking prices reduced.[1] Inventory rose to about 1.16 million homes, 5 percent above a year earlier and the highest level since March 2020.[6] Builders are responding with incentives rather than broad price cuts. About two thirds reported offering incentives in September, including mortgage rate buydowns and upgrades. Lennar has acknowledged accepting lower margins to preserve sales volume.[8] These concessions are helping maintain activity in new homes, but they also signal that affordability has become the industry’s central challenge. Consumer behavior is shifting toward delay, negotiation, and alternative financing. Adjustable rate mortgages represented about 10 percent of applications, while many potential buyers are waiting for rates to fall. Inflation of 3.7 percent in September and higher Treasury yields are adding pressure to mortgage costs.[7] Compared with earlier reports showing tentative stabilization, current evidence points to a renewed slowdown. Transaction volumes are falling, supply is improving modestly, and price pressure is spreading, but widespread forced selling remains limited because many existing borrowers still hold mortgages below 5 percent.[4] For great deals today, check out https://amzn.to/44ci4hQ
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