US housing data released this week point to a market under strain. Home buyers and builders both pulled back as mortgage rates stay near their highest levels in years. Combined with elevated home prices and weaker consumer confidence amid economic uncertainty, buyers are remaining on the sidelines. Mortgage applications continued to fall, which might keep US real estate market activity contained in the months ahead.

The National Association of Realtors reported that its pending home sales index, which tracks.
The National Association of Realtors signed contracts, fell by 7.3% in September to 66.0, the lowest reading since the series began in 2001. Sales were down 11.3% from a year ago, and all four regions declined.
Builders are also slowing down. Housing starts fell by 5.2% in September to an annual pace of 1.221 million units, the second lowest in 25 months. Building permits were roughly flat at 1.4 million, but single-family permits dropped by 4.0% to 845,000, the weakest since March 2023.
October data shows that mortgage demand keeps falling. The Mortgage Bankers Association of American reported today that total mortgage applications fell by 5.3% over the week ended October 16, with purchase applications down 7% and refinancings down 2%.
The average 30-year fixed mortgage rate eased to 7.41% from 7.50% over the same week, its first decline in more than two months, but it remains high enough to keep many buyers on the sidelines.
Mortgage rates have climbed higher with US Treasury yields and inflation worries, and the US Federal Reserve Board (Fed) raising its policy interest rate in September. Further Fed rate increases remain possible, which could keep borrowing costs elevated.

Housing is a large part of the US economy, so weaker sales and construction are a drag on overall economic growth. A sustained drop in mortgage rates would likely be needed before buyers and builders return in force.

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