Mortgage Applications Up as Rates Dip; Housing Market Remains Stable

In the final week of November, homebuyer demand surged, with mortgage applications for home purchases rising by 6%, the highest level since January 2024. This increase was driven by a slight dip in average 30-year fixed mortgage rates, which fell to 6.69%, as well as an uptick in home supply. However, applications for refinancing declined by 1% during the week. Mortgage markets are closely monitoring global geopolitical developments and remarks from Federal Reserve officials ahead of the FOMC’s last meeting of the year, scheduled for December 18.

Meanwhile, the U.S. Census Bureau’s Q3 data on residential vacancies and homeownership revealed little change from the previous year. The rental vacancy rate was 6.9%, a modest increase from 6.6% in Q3 2023 and 6.8% in Q2 2024. The homeowner vacancy rate rose slightly to 1.0%, up from 0.8% in Q3 2023 and 0.9% in Q2 2024. The homeownership rate stayed steady at 65.6%, matching Q3 2023 and Q2 2024 figures.

Home prices also showed signs of moderation. In October 2024, the Freddie Mac House Price Index rose by 3.7% year-over-year and 0.45% month-over-month. The Federal Housing Finance Agency’s index for Q3 was up 4.3% from a year prior and 0.7% quarter-over-quarter, with all nine census divisions recording yearly gains.

November private payrolls grew by 146,000, less than October and expectations, indicating a softening labor market. While wage growth accelerated to 4.8%, marking its first increase in 25 months, sectors like education, health, and construction added jobs, while manufacturing and small businesses reduced their workforce.