Despite Recent Dip in Mortgage Rates, Uncertainty Stalls the U.S. Real Estate Market

Fluctuations in mortgage rates—combined with the ups and downs of the stock market—are creating uncertainty for both buyers and sellers, thus stalling home sales in the U.S., according to

Mortgage rates fell by nearly 50 basis points, averaging 6.61%, down from 7.08% last week, which had been the highest in decades, according to data from Freddie Mac on Thursday. That’s the biggest single-week drop in more than 40 years, but it’s indicative of the roller-coaster ride that has defined 2022. 

“In 2022, absolute week-to-week changes in mortgage rates have averaged 16 basis points, more than three times the five basis point average from 2009 to 2021,” Danielle Hale,’s chief economist, said in a report released Thursday. 

Thursday’s rate drop means “roughly $100 less in monthly mortgage costs for buyers financing 90% of a $425,000 home, the median listing price in October,” she said. 

The median listing price was 11.1% more in the week ending Saturday than the same time last year, the data showed. 

“Expanded purchasing power is undoubtedly a good thing for today’s shoppers, but fluctuations make it difficult to budget and plan for buyers and sellers alike,” Ms. Hale continued. “The uncertainty is leading to hesitation. As both buyers and sellers pull back, median listing prices are slowing and new listings are down even though longer time on market is driving the number of homes actively for sale on any given day higher.”

The loss of buyer confidence is apparent in other numbers. For example, a typical home is staying on the market eight fewer days than it did at this time last year, the data showed. 

In addition, active inventory is up 45% annually, while new inventory continues to slip, dropping 18% from one year ago, according to the report. 

“This marks the 19th week of year-over-year declines in homeowners listing their home for sale, a tangible reflection of the ongoing decline in seller confidence,” Ms. Hale said. “Because potential sellers have pulled back so significantly, prices are decelerating in a more modest fashion than might otherwise be the case.”

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