Housing demand retreats despite this week’s relief
Demand data offer little grounds for optimism. Mortgage applications for new home purchases fell 7% in the latest week, according to the Mortgage Bankers Association (MBA).
September housing starts declined 5.2% month-over-month and 7.4% year-over-year, per the U.S. Census Bureau, while pending home sales also fell to their lowest recorded level, according to the National Association of Realtors (NAR).
Mortgage applications fell last week despite lower rates. Joel Kan of the Mortgage Bankers Association says affordability pressures continue to limit buyer activity. https://t.co/89rtC1fU8r
— Mortgage Professional America Magazine (@MPAMagazineUS) October 21, 2026
“It’s not surprising that when rates climb above 7%, fewer people buy homes because fewer people can afford them,” said Chen Zhao, head of economic research at Redfin.
“The housing market continues to face significant headwinds as elevated mortgage rates and affordability pressures keep many prospective buyers on the sidelines,” said Bob Broeksmit, MBA president and CEO.
Looking ahead, the Federal Open Market Committee (FOMC) meets in November, with CME FedWatch placing hold odds at approximately 85% and December rate hike odds near 90%.
