Housing News

Mortgage Rates Hold Steady as Fall Housing Market Slows

Mortgage interest rates held steady at 7.40% this week, giving homebuyers stability as they navigate a fall housing market with more properties for sale and plenty of price cuts.

The average rate on a 30-year fixed mortgage was unchanged from the previous week, according to Freddie Mac’s data for the week ending Oct. 15. A year ago, the average rate was 6.27%.

The elevated rates are providing homebuyers with more negotiating power.

The share of homes with price reductions reached a four-year high in September, according to Realtor.com data. Pending home sales also fell, potentially giving homebuyers more opportunities to negotiate with sellers on price and concessions.

“Buyers who stay engaged may find footing in a market where motivated sellers are increasingly willing to negotiate,” wrote Realtor.com senior economist Jiayi Xu.

The slowdown is also showing up in new construction.

Mortgage applications for newly built homes declined 8.3% in September compared with a year earlier and were down 8% from August, according to the Mortgage Bankers Association (MBA).

The MBA estimated that new single-family home sales fell 12% from August to a seasonally adjusted annual rate of 584,000, the slowest pace since April 2020.

“The increase in mortgage rates in September had a chilling effect for new home purchase activity,” said Joel Kan, MBA’s deputy chief economist, in a statement.

However, slower sales could prompt some builders to offer incentives to attract homebuyers, including mortgage rate buydowns to lower monthly housing payments, closing cost assistance, or upgrades on the property.