The Housing Market Has Definitely Slowed

Happy Friday!

As many of you know, each Wednesday I research the questions consumers are asking Google and AI tools like ChatGPT about mortgages, homebuying, interest rates and financing options.

My goal is to identify the concerns and misconceptions that are driving consumer decisions—and share those insights with you each Friday, along with the latest real estate and mortgage market news.

This week, the questions are particularly interesting!

With the election behind us, buyers and homeowners are understandably wondering:

• Will the election affect mortgage rates?
• Are home prices finally coming down?
• Should I buy now or wait until 2027?
• Will the Federal Reserve cut rates again in December?
• Is there an advantage to buying during the holiday season?

These are exactly the questions we're exploring in this week's update. While we can't measure every question being asked privately of ChatGPT, current public search discussions and housing-market reports give us a good picture of the concerns on consumers' minds.

And there is some encouraging news!

According to Freddie Mac, the national average 30-year fixed mortgage rate declined to 7.11% yesterday, marking the fourth consecutive weekly decline.

Meanwhile, the housing market is experiencing a pronounced slowdown as we approach the holidays.

So, what does all of this mean for buyers, sellers and Realtors between now and December 31?

Let's take a look!

The Housing Market Has Definitely Slowed

The October housing reports are getting everyone's attention.   According to Zillow, newly pending home listings fell nearly **17% compared with October 2025**, the largest annual decline in more than three years.

Realtor.com also reported that new listings fell 7.5% year over year, while pending listings declined 10.5%.

And Redfin reports that October's national median home-sale price declined 0.4% from a year earlier, the first annual decline in more than three years.

HOWEVER…Orange County remains a collection of very different markets, and desirable, well-priced homes can still attract strong interest.

But nationally, the message is clear:

**Buyers are cautious, sellers are hesitant, and affordability remains the biggest obstacle.**

What Did the Election Change?

The November election has created a new political landscape, with Democrats winning control of Congress while the White House remains Republican.

That means divided government, and potentially more difficulty passing major legislation.  Some investors view political gridlock as limiting the likelihood of major new spending initiatives. Others are concerned about budget negotiations, government funding disputes and the possibility of additional economic uncertainty.

Mortgage rates are influenced by the bond market, inflation expectations, economic growth, Treasury yields and the outlook for Federal Reserve policy.

The election may influence those expectations, but it doesn't directly determine mortgage rates.  **And remember, the Federal Reserve doesn't set mortgage rates!**

Karen's Desk: What I'm Watching Between Now and December 31

There are several things I think will influence our market over the next six weeks.

**1. Inflation and employment reports**   These will continue to be important drivers of Treasury yields and mortgage-backed securities.

Stronger inflation, or unexpectedly resilient economic growth, could push rates higher.

**2. The Federal Reserve's December meeting**  The market will be watching the Fed's policy decision and, perhaps more importantly, its commentary about inflation and the economy heading into 2027.

A Fed rate cut does not automatically produce lower mortgage rates. Sometimes the bond market has already anticipated the move.

**3. The traditional holiday slowdown**

November and December are typically quieter months for real estate.  But people still move because of job changes, family needs, divorce, retirement and other life events.

**4. Seller motivation**

This may be one of the more interesting opportunities.  A seller who has had a property on the market for several months may be more receptive to negotiating price, repairs or allowable closing-cost credits than a seller entering the spring market.

And for buyers struggling with monthly payments, the right financing concession can sometimes be more valuable than a modest price reduction.

A Little Encouraging News!

The Mortgage Bankers Association reported this week that purchase mortgage applications increased **8% from the prior week**, even though they remained 18% below the same week last year.

That's an interesting combination. Overall housing activity remains weak, but the recent improvement in mortgage rates may be encouraging some buyers to reenter the market.

It's too early to call that a turnaround, but it's certainly worth watching.

Ask Karen

**“Should I wait until January or February to purchase?”**

Maybe. But not necessarily!  I would look at three things:

**The property:** Is it priced appropriately? How long has it been on the market? Is the seller motivated?

**The financing:** Can we structure a payment that works comfortably for the buyer today, possibly with a negotiated seller credit or another appropriate financing option?

**The buyer's plans:** Are they financially ready? Is this the right home? Does waiting actually improve their situation?

I would never recommend purchasing based on the assumption that rates will fall or refinancing will become available later.  But I also wouldn't automatically dismiss an opportunity simply because it's November.

One Final Thought

I don't expect the housing market to suddenly come roaring back before New Year's Eve.

But I do think there may be opportunities for buyers and sellers who are willing to approach the market thoughtfully.

The next six weeks will likely bring a combination of holiday-season quiet, continued economic uncertainty and some potentially interesting financing opportunities.

**My advice? Don't try to time the market. Understand the market, evaluate the numbers, and make the decision that works for your particular circumstances.**

As always, I'm here to help you and your clients explore the options.

Have a wonderful weekend!

Karen Card
Sr. Loan Officer | NMLS #235218
The Card Team | American Pacific Mortgage Corporation
714-290-6940
www.card-team.com