Rates aren’t plunging, but have now ticked lower for four straight weeks
Mortgage rates slipped for the fourth week in a row last week, pushing applications slightly higher even as the 30-year average fixed rate remains well above 7%.
The Mortgage Bankers Association’s (MBA) latest weekly mortgage applications survey showed that 30-year benchmark rate slid to 7.21% for the week ending November 6, a mild boost for homebuyers and helping push mortgage applications 6.2% higher.
There’s still no sign of a sustained resurgence in application volume, with affordability challenges, inflation fears and economic jitters continuing to keep many buyers on the sidelines.
MBA vice president and deputy chief economist Joel Kan highlighted that purchase and refi applications “remain considerably lower than a year ago” although refinance activity has posted a decent two-week gain, spurred mainly by higher VA refi applications.
Mortgage professionals have highlighted the symbolism of rates with a seven-handle, which they say can often act as a powerful deterrent for potential homebuyers wondering whether to jump into the market.
While the 30-year average briefly fell below 6% earlier in the year, the Iran war – and fuel price pressures that have followed – have pushed that rate much higher, with Fannie Mae now expecting that rate to remain firmly rooted in the mid-7% range through next year.
Should buyers be focusing on more than rates?
Some homebuyers will be dissuaded by rates at their current level, but Sonoran Lending president and senior loan officer Jay Lessard told Mortgage Professional America he advises clients that rates are just one part of their decision.
At the beginning of the year, few would have predicted that rates would eventually surge above the 7% mark – highlighting the unpredictability of rate patterns, according to Lessard.
“I think consumers sometimes put too much emphasis on waiting for a particular mortgage rate,” he said. “I’ve been doing this long enough to know that it’s extremely difficult to consistently predict exactly where rates will be three or six months from now.
“Instead, I encourage buyers to focus on the things that they can control: their credit, their debt, their downpayment, the purchase price and choosing the right loan structure.”
Another possibility frequently mentioned by brokers is the chance of the housing market warming up in the event of gradual rate declines, potentially adding more competition and eventually leading back to price growth.
“Higher rates have kept some buyers on the sidelines,” Lessard said. “If rates eventually move meaningfully lower, we could see many of those buyers come back into the market at the same time. That could mean more competition for homes.
“So, I wouldn't necessarily tell a qualified buyer to put their plans on hold simply because they're waiting for the perfect rate. If the numbers work today, buy the right home for the right reasons and keep an eye on opportunities to improve the financing later. Many of our buyers are working some very good deals in the current market.”
Rest of year to remain subdued, but some cause for 2027 optimism
For now, Zillow doesn’t see much chance of an imminent recovery for the national housing market, pointing to another big annual decline in sales last month.
The real estate firm’s data showed newly pending home sales plunged by 17% in October compared with the same time last year, marking their most significant year-over-year drop for about three years.
Zillow chief economist Mischa Fisher said the housing market has enough time to post an even worse result before the end of 2026 – but she painted a relatively optimistic picture of the outlook for January onwards.
“Next month is likely going to be the worst of it,” Fisher said. “I expect the pace of the slowdown to ease into the new year. There are deals to be had for buyers able to brave the affordability headwinds in the coming months, and the continued inventory buildup means there is a lot of upside for sales into next year if we get rate relief.”
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