On Tuesday, we’ll get a bunch of data that provides a sense of where the economy is — including the latest on what’s happening with home prices, courtesy of Case-Shiller, and pending home sales from the National Association of Realtors.
Late fall is not typically a big time of year for home-buying, but if recent data from Zillow is right, it looks like October was a decent month for the housing market.
Last month, mortgage rates dropped just under 6.2%, which is the lowest they’ve been in over a year. And people noticed, said Orphe Divounguy, a senior economist at Zillow.
“Buyers and sellers came back,” he said.
Inventory and pending home sales both rose 5% in October, according to Zillow’s data. “Affordability remains a major challenge, right, for most households. However, affordability hit a three-year high in October,” Divounguy said.
That’s largely because of the decline in mortgage rates and the fact that incomes are now growing a little faster than home prices, he added. “As long as incomes continue to rise at a faster rate than housing costs, you get to see an improvement in housing affordability.”
A slight improvement, anyway. The recent increases in both affordability and sales are relative, noted Logan Mohtashami, lead analyst at HousingWire.
“And a lot of this is we are really working from the lowest home sales ever when you adjust it to population,” he said. “So it doesn’t take much to move the needle, but a little bit more buyer-friendly marketplace in 2025” depending on where you live.
There are some big regional differences, said Danielle Hale, chief economist at Realtor.com, “With the Northeast and the Midwest seeing relatively stronger price growth, and the South and the West seeing relatively weaker price growth.”
Overall, Hale said that the housing market is still slow, as it has been for a long time now. “But it is interesting to see people reengage, and this mirrors what we saw roughly a year ago: when mortgage rates get into the low 6% range, we do see more engagement, more buyer activity, more listing activity, as well.”
And if mortgage rates stay in the low fosixesr a while, Hale said that will bode well for the housing market.