U.S. mortgage rates fall for two consecutive weeks but struggle to boost market; home sales prices decline for the first time in over three years

English Planet Daily has learned that mortgage rates in the United States have fallen for a second consecutive week, but remain above 7%, failing to effectively boost the persistently sluggish housing market. The high cost of buying a home is forcing potential buyers to delay their purchase plans, while more and more sellers are lowering their listing prices. The latest data shows that U.S. home sale prices have declined for the first time in more than three years, further intensifying the supply-demand imbalance in the housing market.

According to data released by Freddie Mac on Thursday, the average rate for a 30-year fixed mortgage in the U.S. fell from 7.32% last week to 7.24%, marking its second consecutive weekly decrease but still near the highest levels since November 2023. In comparison, the mortgage rate at this time last year was only 6.17%.

It is noteworthy that the 30-year mortgage rate in the United States has stayed above 7% for six consecutive weeks, setting the longest streak since the end of 2023. Although rates have eased from the three-year peak of 7.4% seen in mid-October, they are still more than one percentage point higher than at the start of the year, worsening affordability for homebuyers.

Persistent High Interest Rates Suppress Demand, Mortgage Payments Significantly Increase

The U.S. housing market is caught in a predicament where high home prices and high interest rates reinforce each other. On one hand, persistently high mortgage rates make it hard for many potential buyers to afford home costs; on the other hand, homeowners with low-rate mortgages are reluctant to sell to avoid taking on higher financing costs with a new purchase, further restricting housing supply in the market.

According to related calculations, for the purchase of a $500,000 home with a 20% down payment, the monthly payment for principal and interest is currently about $333 higher than at the end of February this year, when U.S. mortgage rates briefly dipped below 6%.

If purchasing a $1,000,000 home at the same down payment ratio, the monthly mortgage payment is approximately $666 higher than at the end of February.

Data from real estate agency Redfin shows that the median monthly mortgage payment for U.S. homebuyers is hovering near record highs. Mike Fratantoni, Chief Economist of the Mortgage Bankers Association (MBA), noted that a significant drop in U.S. mortgage rates is unlikely in the near future. “We expect no significant relief in mortgage rates during the forecast period.”

He pointed out that current mortgage rates, near three-year highs, are leading to notable slowdowns in home sales, mortgage lending, and commercial real estate market activity.

Meanwhile, the Federal Reserve decided to keep rates unchanged at its monetary policy meeting in October, and the market expects a further rate hike at its final meeting of the year. This means the U.S. housing market may not get obvious rate support in the short term.

U.S. Home Prices Drop for First Time in More Than Three Years, Sellers Far Outnumber Buyers

As affordability continues to worsen, increasingly obvious signs of price cuts are emerging in the U.S. real estate market.

Redfin reported on Thursday that the median sale price of U.S. homes has fallen for the first time in over three years, reflecting how high home-buying costs are weakening sellers’ pricing power. Meanwhile, there are notable changes in the supply-demand relationship. Redfin’s data shows that in September this year, there were nearly 63% more sellers than buyers in the U.S. housing market, marking the widest gap since relevant statistics began in 2013.

This data suggests that while some existing homeowners are still unwilling to sell, the number of people willing to buy is dropping even faster, giving buyers more leverage in price negotiations.

Redfin Senior Economist Asad Khan stated that there is a noteworthy contradiction in the current U.S. housing market: from the supply perspective, buyers face one of the most favorable market environments in years, but high home-buying costs prevent many from taking advantage. “Ironically, from the supply angle, it may be the most buyer-friendly environment in years,” Khan said, “but this comes at a time when costs are so high that fewer people can afford a home.”

New Home Sales Remain Weak, Builder Confidence Hits 14-Year Low

High mortgage rates are impacting not only the existing home market but also dragging down sales of newly constructed homes. Data from the U.S. Census Bureau released on Tuesday shows new single-family home sales dropped 0.6% month-on-month in September, indicating persistent weakness in demand.

New home prices also face downward pressure. Among nine months of data released so far in 2026, the median new home sale price in the U.S. has declined in seven months. Facing sluggish sales, more residential builders are forced to lower prices and offer incentives to attract buyers, further squeezing company profit margins.

According to the Housing Market Index jointly compiled by the National Association of Home Builders (NAHB) and Wells Fargo, due to high mortgage rates, persistent labor shortages, and rising building material costs, U.S. homebuilder confidence has fallen to its lowest level in 14 years.

The difficulties faced by builders also reveal that the U.S. housing market’s weakness is not simply due to a lack of supply, but high financing costs are continuously suppressing market activity from the demand side.

Short-Term Housing Market Recovery Still Faces Challenges

Overall, although U.S. mortgage rates have eased slightly for two consecutive weeks, financing costs above 7% continue to put clear pressure on the housing market.

For potential buyers, high home prices combined with high rates keep monthly mortgage payments near historical highs; for sellers, fewer buyers mean longer selling cycles and increased pressure to cut prices. Furthermore, slow new home sales, builder confidence at a 14-year low, and significantly more sellers than buyers in the resale market all show that the U.S. housing market still lacks lasting recovery momentum.

With the Federal Reserve possibly raising rates again in the short term and mortgage rates unlikely to drop significantly, the U.S. housing market is expected to continue facing twin pressures of weak demand and price adjustment.