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ortgage rates slipped this week, with the 30‑year fixed averaging 6.27%, close to the year’s low of 6.26%. Economists say further declines are unlikely; buyers who wait for lower rates risk higher prices without rate relief. Sellers are testing the market: new listings rose 4.1% year‑over‑year in the four weeks ending Oct. 12, the largest jump in over four months, while pending sales fell 1.2%—the steepest drop in five months. Median home prices edged up 1.9% YoY. Despite the rate drop, demand remains weak. Buyers cite job‑security worries and the high cost of borrowing, with many waiting for rates below 6% before committing. The federal shutdown is adding pressure, especially in regions with large government workforces, such as Kansas City, where furloughs and potential layoffs are dampening interest. Mortgage‑banking data show a 1.8% decline in overall applications and a 3% drop in purchase‑related filings for the week ending Oct. 10, though FHA applications rose, benefiting from rates roughly 10 basis points lower than conventional loans.
In the construction sector, optimism is creeping. The National Association of Home Builders’ confidence index climbed to 37 in October, up four points from September, though still modest compared to recent years. Builder sentiment on current sales, six‑month outlook, and buyer traffic all improved, with future‑sales confidence jumping nine points to 54. Chief economist Robert Dietz notes that builders anticipate a modest uptick in sales, even as supply‑side costs remain a hurdle. NAHB projects a 3% rise in single‑family permits for September, despite the absence of Census data due to the shutdown.
Washington, D.C. is feeling the shutdown’s impact early. Pending sales are down 6.7% YoY, days on market have risen to 43—nine days longer than a year ago—and new listings are up 9.8%. Home prices have held steady, with a median sold price of $600,500, a 0.3% increase from last year. The market’s response to the shutdown underscores the broader trend of cautious buyer behavior amid economic uncertainty.
