Mortgage Rates Dip To 3-Year-Lows As Home-Sellers Outnumber Buyers

Authored by Naveen Athrappully via The Epoch Times,

The weekly mortgage rate on a 30-year fixed-rate mortgage fell to 6.18 percent for the week ending Dec. 24 as the housing market continues to lean in favor of buyers.

The 6.18 percent rate is the lowest level since 2022 and a slight decline from 6.21 percent the previous week, according to Freddie Mac data. The current rate is 0.86 percentage points below the yearly peak of 7.04 percent reached in mid-January.

The recent rate decline comes as the U.S. housing market registered 37.2 percent more sellers than buyers in November, real estate brokerage Redfin said in a statement on Dec. 23.

“That’s the largest gap in records dating back to 2013 aside from this summer. It compares with 35.6 percent a month earlier and 17 percent a year earlier,” the brokerage said.

“Redfin defines a market with over 10 percent more sellers than buyers as a buyer’s market. By this definition, it has been a buyer’s market since May 2024.”

The 37.2 percent gap translates into 529,770 more sellers in the market.

Among the 50 most populous U.S. metropolitan regions, Austin, Texas, was the strongest buyer’s market last month, with 114 percent more sellers than buyers, according to Redfin.

This was followed by San Antonio, Texas; Nashville; and Fort Lauderdale, Florida, each of which had sellers outnumbering buyers by more than 100 percent.

Out of the 50 metros, 36 were buyer’s markets, seven were balanced, and the remaining seven were seller’s markets.

The number of home buyers hit the second-lowest level on record in November, as many backed off amid economic uncertainty and high housing costs, the statement said.

“A modest improvement in housing affordability could bring some homebuyers off the sidelines in 2026, which could narrow the gap between homebuyers and sellers,” Redfin senior economist Asad Khan said.

“But the housing market is likely to remain in buyer’s market territory for the foreseeable future, with sellers cutting prices or offering concessions to lure buyers.”

Builder confidence in the market for newly built single-family homes inched higher this month despite businesses facing challenges such as rising construction costs, economic uncertainty, and buyer hesitation, the National Association of Home Builders (NAHB) said in a Dec. 15 statement.

“In positive signs for the market, builders report that future sales expectations have been above the key breakeven level of 50 for the past three months, and the recent easing of monetary policy should help builder loan conditions at the start of 2026,” NAHB chief economist Robert Dietz said.

The Federal Reserve has cut its benchmark interest rates three times this year, pushing it down to a range of 3.5 to 3.75 percent.

In a Dec. 11 commentary, Lisa Sturtevant, chief economist at real estate data company Bright MLS, suggested that even if mortgage rates were to decline further, other concerns are weighing on prospective buyers’ minds.

On the positive side, Sturtevant expects mortgage rates to fall further.

“Expect mortgage rates to ease somewhat in 2026, though Bright MLS forecasts are for rates to remain above 6 percent through the end of next year,” she wrote.

“Slightly lower rates and slower price growth should improve affordability a little, which could bring more buyers into the market.”

President Donald Trump has vowed to lower mortgage costs.

“I will announce some of the most aggressive housing reform plans in American history,” he said during a televised address on Dec. 17.

Trump said he plans to announce a new Federal Reserve chairman who will support lower interest rates, which will trigger further decline in mortgage rates.

He suggested that illegal immigration under the Biden administration contributed significantly to housing costs.

“Over 60 percent of growth in the rental market came from foreign migrants,” the president said. “For the first time in 50 years, we are now seeing reverse migration as migrants go back home, leaving more housing and more jobs for Americans.”