Over the past 48 hours, the US housing industry has shown key signs of transition as mortgage rates have dipped to their lowest levels of 2025, falling to around 6.13 percent, the lowest in over a year and offering renewed affordability for buyers. For those seeking a $1.4 million home, this change means savings of more than $550 per month on their mortgage compared to earlier in the year when rates were closer to 7 percent. This decline in rates has coincided with a quiet surge in housing inventory, which recently reached 860,426 active listings nationally. This marks a return to pre-pandemic levels and, in some markets like Orange County, inventory is up 18 percent versus last year, giving buyers more choices and negotiating power. However, the last two weeks saw inventory tighten again, falling by 4 percent, as sellers pull listings in advance of the typical holiday slowdown.
Despite reduced rates and expanded inventory, overall housing turnover remains exceptionally low, with just 28 out of every 1,000 homes changing hands this year. This is the lowest turnover in forty years, due in part to ongoing economic uncertainty, caution among sellers, and effects from the recent federal shutdown that temporarily impacted mortgage approvals for buyers relying on government-backed loans, stalling deals for many. During the shutdown’s week ending October 24, USDA mortgage applications plunged 26 percent.
Meanwhile, recent months have witnessed a slight drop in US median home prices, which fell by $12,300 in the second quarter to $410,800. This has given further leverage to buyers, especially as sellers who have had homes sitting on the market longer are increasingly willing to negotiate prices, offer seller credits, and help buy down interest rates.
While no major regulatory disruptions or shakeups among industry leaders have occurred over the past week, the sector remains cautiously optimistic. Emerging competitors and proptech startups continue to innovate, but market activities are primarily defined by shifts in inventory, rates, and consumer patience. Compared to reporting earlier this year, market stabilization and increased buyer leverage are now notable, contrasting with the frantic bidding and low inventory that defined much of the prior two years.
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