I promised you good news in the headline, and here it is: For three weeks in a row, mortgage rates have been falling, now hovering just below 7.5% (and even dipping under 7.2% on Thursday).
The not-so-good news?
According to the latest report from the Mortgage Bankers Association, total mortgage application volume fell 1.2% from a week prior (and 2% on an unadjusted basis).
So, rates are falling, but buyers aren’t calling. Why?
Would-be buyers are watching rates closely, but they aren’t seeing a clear pattern. Rates climb one week, fall for a few weeks, and then pop right back up. Buyers want to see a consistent, long-term downward trajectory before purchasing with confidence. Until then, they remain in wait-and-see mode.
What will it take to get them back in the game? Dropping into the 6% range will likely draw many of those buyers off the sidelines. For now, they’re just dipping their toes in the water.
Sellers, on the other hand, remain optimistic. A strong indicator of this is the low rate of off-market withdrawals: only 4.4% of listings were pulled in October, compared to 4.6% in October of last year. As I highlighted in my local market update (with data courtesy of Reports on Housing), sellers aren’t taking their homes off the market—they’re adjusting their pricing.
Look at the numbers for homes sold below their original list price last month:
- Calabasas: 76%
- Studio City: 75%
- Sherman Oaks: 72%
- Encino: 62%
As this trend continues into the holiday slowdown, sellers must be precise with their pricing strategy. Buyers, meanwhile, should keep a close watch on the November and December inventory. With far less competition and increased negotiating leverage, opportunities will pop up for those ready to act quickly.
Over the next two months, expect pockets of high activity for well-priced homes in prime locations, alongside areas where sales remain flat. It’s the natural byproduct of buyers waiting on rates and sellers holding out for the right move.
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Andrew Manning • REALTOR® • Berkshire Hathaway HomeServices California Properties
DRE: 00941825 • 818-380-2147 • andrew@andrewmanning.com