H
ome sales have improved despite rising mortgage rates, with buyers appearing to adjust their expectations. Key points include:

    The 30-year fixed-rate mortgage averaged 6.91% this week, the highest level since July, but still up from last year's average of 6.62%. Mortgage applications slowed during Christmas week as expected.

    Pending home sales jumped 2.2% in November compared to October and were up 6.9% year-over-year across all regions. The West saw the largest increase at 11.8%, followed by the South, Northeast, and Midwest.

    Consumers have "recalibrated expectations" regarding mortgage rates, according to NAR Chief Economist Lawrence Yun, who notes that buyers are no longer waiting for big declines in rates. They're now better positioned to negotiate as the market shifts away from a seller's market.

    Despite predictions of easing mortgage rates, several factors have kept them elevated, including the Federal Reserve's forecast of fewer rate cuts and concerns about inflation. The housing market is "feeling the heat" of high rates, but homebuying activity picked up through November.

    Existing and new home sales were both up year-over-year in November, and inventory is up 17.5% compared to last year, providing opportunities for winter buyers who want to get ahead of the busier spring season.

    Mortgage applications fell during Christmas week, down 21.9% compared to two weeks earlier, with refinance and purchase applications also declining due to the rise in rates.