Zillow Economist Gives Somber Outlook on Housing Market, Mortgage Rates
Newly pending home sales fell 17 percent in October compared with a year earlier.
The U.S. housing market may experience further challenges as elevated mortgage rates deter potential buyers, according to Zillow. The real-estate marketplace's chief economist, Mischa Fisher, warned that the slowdown may intensify before improving. October saw a 17 percent year-over-year decline in pending home sales, the sharpest annual decrease since 2023.
Fisher predicted November could be the weakest month, but sales might rebound next year if mortgage rates decrease. Currently, the average 30-year fixed mortgage rate stands at 7.18 percent, up from 6.22 percent a year ago, while U.S. home values dipped 0.6 percent from September to October but are 0.7 percent higher than a year earlier.
Zillow anticipates mortgage rates to stay above 7 percent through mid-2027, potentially leading to a sluggish 2027 homebuying season. While the average monthly mortgage payment for a typical U.S. home reached $2,004 in October, up 12.8 percent from a year prior, home values have remained resilient, rising slightly despite declining sales.
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