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Mortgage rates spiked from 6.78% last week to 6.84% for a 30-year fixed home loan for the week ending Nov. 21, according to Freddie Mac.
“Mortgage rates ticked back up this week, continuing to approach 7%,” said Sam Khater, Freddie Mac’s chief economist. “Heading into the holidays, purchase demand remains in the doldrums.”
The upward climb in rates can be traced to Nov. 5.
“Concerns over inflation, driven by potential tariffs and rising labor costs due to reduced immigration, initially caused interest rates to rise postelection,” notes Realtor.com® economic data manager Sabrina Speianu in her latest analysis.
The housing market is still adjusting to potential economic shifts following Donald Trump’s presidential victory as the economy anticipates what will happen following Inauguration Day on Jan. 20, 2025.
A new survey commissioned by Realtor.com has also found that Republicans are more optimistic after his win, while Democrats are less so.
Roughly 1 in 5 Republicans say they are now more likely to buy a home as a result of the election, while 24% of Democrats say they are now less likely to do the same in the next 12 months, according to the survey.
Voters without a party affiliation were the most likely to say the election had no impact on their homebuying plans, with 74% of independents reporting that Trump’s election had not changed their plans to buy a home.
With a little over five weeks until the end of the year, and an inauguration looming, here’s a snapshot of the latest real estate data and what it means for homebuyers and sellers, in the newest installment of our Weekly Housing Market Update.
Mortgage rates remain high
While mortgage rates sank to 6.08% in late September, the number reached the high-6% range by late October and has remained elevated since.
Rates pushing 7% “cooled the late-fall housing market, much to the disappointment of buyers hoping to find some relief,” says Realtor.com senior economic research analyst Hannah Jones.
Next month isn’t expected to be much better.
Last week’s inflation report showed a modest uptick in consumer price growth. Jones believes this could translate into a pause in the Federal Reserve’s rate cuts in December, especially given market uncertainty ahead of Inauguration Day.
As we move into the coming months, “keeping a close watch on mortgage rates will be essential for anyone looking to navigate this changing landscape,” says Speianu.
Home prices dip slightly
While mortgage rates haven’t offered much relief to buyers, home prices are moving in the right direction.
The median list price for a home fell 0.7% year over year for the week ending Nov. 16 compared with the same time a year prior.
This marks the 25th week in a row that the median list price was less than or equal to what it was in the corresponding week in 2023.
With median listing prices dropping for the past four weeks straight, this offers “potential opportunities for buyers ready to act,” says Speianu.
The number of homes for sale increases
Homebuyers also have more fresh housing stock to choose from.
For the week ending Nov. 16, more sellers listed their homes compared with a year prior, and new listings were up by 3.5%.
This offered a “glimmer of hope” for homebuyers seeking fresh choices, according to Spieanu.
Overall, housing stock increased for the week ending Nov. 16, with the total number of homes for sale at 25.9% above year-ago levels, marking a 54-week streak of more homes being listed for sale than in the prior year.
Yet, this week’s housing stock growth was smaller than last week’s, marking the eighth consecutive week of deceleration and the smallest annual increase since late March.
While the market continued to see more listings year over year, “the pace of growth suggests a more cautious environment where sellers are holding back,” says Speianu.
Much of the seller hesitation can be chalked up to the roughly 84% of mortgages with a rate of 6% or lower, “emphasizing the importance of lower rates to bring sellers back into the housing market,” adds Jones.
The pace of the market slows
Buyers aren’t rushing to make offers these days and instead are “taking their time—creating a more balanced but tentative housing landscape,” says Speianu.
Indeed, homes spent 10 more days on the market for the week ending Nov. 16 than last year. (The average home spent 58 days on the market this October.)
The increase in the length of time a home stays on the market reflects a cautious approach from many buyers who are “holding out for more favorable housing conditions,” says Speianu.
However, for those prepared to make a move, “the current market offers the chance to secure a home with less competition and potentially better deals,” she adds.