Demand to buy a home in the United States has fallen to one of its lowest points in three decades, even as mortgage rates eased for a third straight week, according to 24/7 Wall St., citing data from Freddie Mac, S&P Case-Shiller and the Mortgage Bankers Association’s purchase-applications index.
Freddie Mac’s 30-year fixed mortgage rate fell to 7.18% on November 5 — its third consecutive weekly decline — but the Mortgage Bankers Association’s purchase mortgage applications index still dropped 2% over the week, to 131, its sixth-lowest weekly reading since 1995. Rates have climbed 1.2 percentage points since bottoming at 5.98% on February 26, adding roughly $316 a month, or $3,792 a year, to the payment on a $400,000 mortgage, per the report.
Two forces are squeezing both sides of the market at once, 24/7 Wall St. reports. On the supply side, millions of homeowners who locked in 3–4% mortgages during the low-rate years have little incentive to sell and take on a new loan above 7%, keeping listings thin — the S&P Case-Shiller national home price index stood at 336.7 in August, just below July’s 337.3, the highest level of the past year. On the demand side, buyers face both near-record prices and 7% borrowing costs simultaneously: existing-home sales ran at a 3.99 million annualized pace in September, below the 4.5–5.5 million range considered healthy, and the Kobeissi Letter reports purchase applications are down 32% since January and roughly 50% below 2019 levels.
The slowdown is also reaching new construction. Housing starts fell to a 1.22 million annualized pace in September, down from 1.52 million in March — a leading indicator that, because construction activity typically leads the broader economy by 12 to 18 months, points to continued softness into 2027, per the report. University of Michigan consumer sentiment fell to 48.1 in September, a level the report notes has historically coincided with recessions.
24/7 Wall St. identifies the clearest signal to watch for a turning point: whether the 10-year Treasury yield, which has eased to 4.84%, pulls the 30-year mortgage rate clearly below 7%, and whether the weekly purchase-applications index climbs off its current reading of 131 in response. If rates fall further but applications keep sliding, the report says that would point to home prices themselves — rather than rates — as the binding constraint on the market, with a year-over-year decline in the Case-Shiller index as the next thing to watch for.
