A Close Look at the Latest Mortgage Rates, Fed Rumblings, and the ‘Promising’ Future of Housing

In the wake of the Federal Reserve’s much-anticipated decision to not raise rates on Wednesday, mortgage interest rates also held surprisingly steady, taking a breather from the extreme fluctuations that have been torturing homebuyers of late.

For the week ending Sept. 21, rates for a 30-year fixed-rate loan landed at an average of 7.19%—just a hair above last week’s rate of 7.18%, according to Freddie Mac.

The Fed based its decision to keep rates as is on several economic indicators, including a softening of core inflation (which excludes the volatile food and energy categories) and a strong job market. Yet while the Fed has granted a reprieve of sorts for now, whether or not its decision will oil the works of a stuck housing market remains to be seen.

But the future looks positive.

“Looking ahead, if incoming data continues to align with market expectations, it sets a promising tone for the housing market’s stability,” says Sabrina Speianu, data scientist at Realtor.com®, in her analysis. “This, in turn, provides a conducive environment for both buyers and sellers to make more effective long-term plans.”

We’ll explain what the latest Fed news and real estate statistics mean for both homebuyers and sellers in our latest installment of “How’s the Housing Market This Week?”

The ongoing inventory crunch

High mortgage rates have been keeping the supply of housing for buyers scarce.

“The recent uptick in mortgage rates continued to cause many current homeowners to feel somewhat ‘locked in,’ discouraging them from selling their homes,” explains Speianu.

New listings have slid for 63 weeks, and were down by 6.0% compared with a year ago for the week ending Sept. 16. Overall inventory also shrank, by 4.4% year over year.

The home price problem

With the supply side of home inventory being squeezed, home prices have remained stubbornly elevated.

“Heading further into the fall season, home listing prices continue to be propped up by a low existing home inventory, as higher mortgage rates contribute to an ongoing existing home inventory crunch,” says Speianu.

Until more homes hit the market, it seems that home prices are basically staying put, hovering at a median of $435,000 in August. For the week ending Sept. 16, median listing prices grew by 0.2% over this same week last year. This trend of stable or increasing prices has persisted for nine consecutive weeks, with the price not predicted to move significantly—up or down—anytime soon.

So while median prices didn’t hit last year’s record high of $449,000, “it looks like we might stay slightly ahead of last year’s figures throughout the autumn and winter months,” says Speianu.

Where buyers can find homes

There is a tiny beacon of homebuying hope on the horizon of scarce listings.

“As the inventory of existing homes remains tight, new construction has emerged as an enticing alternative for prospective buyers,” says Speianu.

These homes not only offer an alternative to pre-existing homes, but many homebuilders have been offering to fund mortgages at reduced interest rates compared with what buyers will find with traditional lenders.

When buyers should make a move

Despite affordability hurdles and a lack of listings, buyers are still making offers.

A typical home spent the same amount of time on the market for the week ending Sept. 16 as a home did a year ago. This is a significant milestone 59 weeks in the making, as for more than a year, homes had been taking longer to sell.

“As the real estate market continues to recover from the slowdown experienced in 2022, it’s highly likely that homes will start selling more swiftly compared to a year ago in the coming weeks, even though the demand may not be as high,” says Speianu.

Buyers looking to score a deal as the fall season kicks into gear should note that the Realtor.com economic team pegs Oct. 1–7 as the very best week to buy a home this year. During this golden week, homebuyers can expect to save more than $15,000 on median home prices and have up to 18.9% in new listings to choose from compared with the beginning of the year.