The Federal Reserve announced on November 1st that it would refrain from raising interest rates for the time being, but it did not rule out the possibility of doing so before the end of the year. Therefore, we need to closely monitor market changes and related information regarding the future direction of mortgage interest rates.

Although the decrease in mortgage interest rates is good news for homebuyers, we must also note that the previous rates were still at their highest levels since 2000. This indicates that the cost of financing still has a significant impact on the housing market and is a sector of the economy particularly sensitive to interest rates.

In addition to high mortgage interest rates, buyers also have to contend with the challenge of high housing prices. The national median home price has been hovering around $425,000 recently.

In October, prices rose by 1.2% compared to the same period last year, reaching the highest increase in 25 weeks. This is mainly attributed to persistently low inventory of existing homes for sale, leading to a supply-demand imbalance.

The real estate market needs more homes for sale to alleviate the supply-demand imbalance. However, in the week ending October 28th, the national inventory of homes for sale decreased by 1% compared to the same period last year, marking the 19th consecutive week of decline.

Compared to typical pre-COVID levels in 2019, the number of homes for sale is 41.8% lower. Therefore, housing supply still cannot meet market demand.

However, it is worth noting that in the week ending October 28th, the number of newly listed homes increased by 5.6% compared to the same period last year. This is a positive change since mid-2022.

In recent times, the increase in mortgage interest rates has led to homeowners with existing low-rate mortgages being reluctant to sell their homes, resulting in a decrease in newly listed homes. However, the reversal of this trend still requires further observation.

Although the number of newly listed homes has increased, overall listing activity still lags significantly behind pre-pandemic levels. Buyers may face fewer choices when searching for their ideal homes.

Nevertheless, the time homes spend on the market has decreased.

According to data, in the week ending October 28th, homes spent one day less on the market compared to the same period last year. This indicates an increase in the speed of home transactions due to a decreased number of homes that buyers compete to purchase.