D
espite a holiday‑season dip in buyer activity, falling mortgage rates and a rebound in loan applications hint at a potential upswing for the market’s slow period. The 30‑year fixed‑rate averaged 6.23% last week, a slight decline from 6.26% and well below the 6.81% seen a year earlier. Freddie Mac’s weekly data confirms the trend, while Mortgage News Daily reports a 6.22% average on Nov. 26, the lowest in three years. Analysts caution that a Fed rate cut on Dec. 10 may not translate into a dramatic drop in mortgage rates, though a modest further decline is possible. Upcoming government data releases, including jobless claims that fell to a seven‑month low, could influence the trajectory if inflation eases and the labor market strengthens.

    Mortgage applications are gaining momentum ahead of the post‑Thanksgiving lull. The Mortgage Bankers Association’s seasonally adjusted purchase index rose 8% in the week ending Nov. 21, and government‑backed loans (FHA, VA, USDA) increased 9%, marking the strongest week since 2023. For buyers, home prices are becoming more attractive. The price per square foot has slipped 1.5% YoY, with an average of $210.60 as of Nov. 24. Supply remains ample and demand has eased long enough for prices to fall, though a sudden uptick in demand could reverse the trend, especially as rates continue to drop. Current price reductions are high nationwide, potentially setting the stage for spring pressure.

    Demand, however, is cooling as the holiday season approaches. Redfin data shows a slowdown in pending sales; signed contracts fell 2.1% YoY in the four weeks to Nov. 23, the steepest decline in eight months. The Homebuyer Demand Index dropped to its lowest in two months, yet Google searches for “homes for sale” hit a peak not seen since August, indicating lingering interest.