Mortgage Rates Hit Lowest Level Since 2024

 

Mortgage Rates Fall — What It Means for Home Sales

Mortgage rates hit lowest level in the U.S. in more than a year, providing a potential lift for homebuyers and signaling a possible thaw in the sluggish housing market. This decline in borrowing costs could help boost home sales activity in early 2026 as buyers re-enter the market.

Key Takeaways:

• Mortgage rates have dropped to their lowest level since 2024, improving homebuyer affordability.
• The average 30-year fixed mortgage rate decline increases purchasing power and lowers monthly payments.
• Lower borrowing costs could stimulate homebuyer demand and contract activity.
• The rate drop may help drive stronger U.S. home sales in early 2026, especially during the spring selling season.

30-Year Mortgage Rates Drop Significantly

According to recent data, the average rate on a 30-year fixed-rate mortgage has dipped to around 6.12%–6.15%, its lowest level in roughly 15 months. This marks a sharp change from earlier in 2025, when rates hovered near 6.89% and—at times—above 7%. The decline is noteworthy given that mortgage rates significantly impact home affordability and buyer demand.

Lower mortgage rates directly affect monthly mortgage payments, giving qualified buyers more purchasing power and potentially encouraging hesitant buyers to jump into the housing market. Every percentage point drop in mortgage rates can save buyers thousands in interest over the life of a home loan, making homes more affordable without a change in prices.

Why Mortgage Rates Are Falling

Mortgage rates often reflect broader economic conditions, including the movement of long-term U.S. Treasury yields and expectations around Federal Reserve interest rate policy. Analysts point to several factors behind the recent rate drop:

• Treasury yields have fallen, reducing the benchmark lenders use to price mortgage loans.
• Market expectations of future Fed rate cuts have grown, pushing down longer-term interest rates.
• Slower job growth data and other economic indicators have heightened expectations of further monetary easing.

Impact on Home Buyers and Sellers

For homebuyers, especially first-time buyers, the drop in mortgage rates could make it easier to qualify for financing or afford a larger home. Lower rates also tend to increase buyer competition, which can stimulate more offers and faster contract signings in markets with limited inventory.

For home sellers, increased buyer activity tied to lower borrowing costs can help reduce time on market and potentially support higher sale prices, especially if inventory remains tight.

Housing Market Outlook for 2026

While lower mortgage rates are a positive sign, experts caution that other housing market headwinds—such as limited housing inventory and higher home prices—continue to challenge affordability and slow sales. Nevertheless, the recent slide in rates gives buyers and sellers reason to be cautiously optimistic as the 2026 spring selling season approaches.

 

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National Pending Home Sales Surge in November

 

Pending Home Sales See Strongest Growth in Nearly 3 Years

The latest housing market data shows a meaningful rebound in homebuyer activity, with pending home sales rising sharply in November — the biggest month-over-month increase since early 2023. This uptick reflects solid buyer momentum as mortgage rates soften and home sales pick up across key U.S. regions.

Key Takeaways:

• Pending home sales rose 3.3% in November, marking the strongest monthly increase since early 2023 and signaling renewed housing market momentum.
• All four U.S. regions reported contract growth, reflecting broad-based homebuyer demand.
• Lower mortgage rates and improving housing inventory helped drive more signed purchase agreements.
• Rising pending contracts suggest existing home sales could strengthen in early 2026, pointing to a potential rebound in overall home sales activity.

Pending Home Sales Jump 3.3% in November

According to the National Association of Realtors® (NAR), the Pending Home Sales Index (PHSI) climbed 3.3% in November compared with October, significantly outpacing economists’ expectations. On a year-over-year basis, pending contracts were also up about 2.6%, signaling renewed interest from homebuyers in signing purchase agreements.

Pending home sales are a leading indicator of future existing home sales, representing homes with signed contracts that have not yet closed. Because sales typically close one to two months after a contract is signed, this increase is a strong signal that existing home sales may gain steam in early 2026.

All Regions Show Growth in Home Sales Contracts

The November gains weren’t isolated to one part of the country. All four major U.S. regions reported increases in homes going under contract:

• West: ~9.2% month-over-month increase
• South: ~2.4% month-over-month increase
• Northeast: ~1.8% month-over-month increase
• Midwest: ~1.3% month-over-month increase

This widespread improvement suggests broadening buyer demand, not just localized market strength.

What’s Driving Uptick in Home Sales?

Industry economists point to several key drivers behind the pending sales surge:

• Lower mortgage rates — Borrowing costs remained relatively attractive in November, pulling more buyers off the sidelines.
• Improved affordability — Wage growth outpacing home price gains has helped make homeownership more accessible.
• Growing inventory — More housing choices compared with last year have given buyers expanded options, prompting contract signings.

NAR Chief Economist Lawrence Yun described the data as the “strongest performance of the year after accounting for seasonal factors, and the best in nearly three years.”

What This Means for Home Sellers & Buyers

For home sellers, rising pending contracts can signal a warming market and potentially shorter time on market once listings go live — especially in regions where inventory is limited.

For buyers, increasing contract activity often aligns with improving confidence and potentially more competitive offers as buyer interest returns. Even though affordability challenges continue in some markets, the November momentum suggests a possible easing of market headwinds.

Outlook: Home Sales Expected to Follow Pending Trends

While pending home sales don’t guarantee closed deals, they are a reliable forward indicator of home-sale volume. With nearly all regions showing stronger contract activity and mortgage rates remaining more favorable than earlier in 2025, industry forecasts expect home sales to strengthen in the first half of 2026.

 

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