Mortgage Costs Ease, but Buyers Still Face a Tough Market

WHO:

CNBC - Joel Kan, an economist at the Mortgage Bankers Association (MBA), said mortgage rates had decreased for the first time in more than two months, but purchase and refinance applications continued to decline.

ABC News - Lawrence Yun, chief economist at the National Association of Realtors (NAR), attributed the drop in pending sales to rapidly rising mortgage rates and said higher energy prices were adding uncertainty.

ABC News - Samuel Tombs, Pantheon Macroeconomics’ chief U.S. economist, said affordability was “too stretched” for higher mortgage rates to leave no mark.

Fox Business - Jake Krimmel, a senior economist at Realtor.com, said a rise in mortgage rates erased about $22,000 in purchasing power for a buyer budgeting $2,000 a month for principal and interest.

ABC News - An ABC News-Washington Post-Ipsos poll found that half of adults said their mortgage or rent was unaffordable.

WHAT:

CNBC - Total mortgage application volume fell 5.3% week over week. Applications to refinance fell 2% week over week and were 59% below the same week a year earlier; purchase applications fell 7% week over week and 18% year over year.

CNBC - The average contract rate for a 30-year fixed mortgage with a conforming balance of $832,750 or less fell to 7.41% from 7.50%. Points, including the origination fee, fell to 0.75 from 0.83 for loans with a 20% down payment.

ABC News - Pending home sales fell 7.3% month over month, reaching the lowest level in the Pending Home Sales Index’s history; the index began in 2001.

ABC News - Mortgage News Daily reported an average 30-year fixed mortgage rate of 7.43%, up from 7.37% on Friday.

ABC News - NAR data indicated that a rise in mortgage rates from 6% to 7% leaves nearly 6 million fewer Americans able to afford the median-priced home’s monthly payment with a 10% down payment. The median single-family home was around $435,000.

ABC News - Pantheon Macroeconomics estimated the typical monthly payment on a median-priced home would reach 40% of average after-tax income, compared with 35% at the start of the year.

ABC News - Housing starts fell 5.2% month over month and 7.4% year over year to an annualized 1.221 million units.

Fox Business - Realtor.com’s market clock shifted one hour toward buyers from the second quarter and stood at 4 o’clock, indicating a late balanced market trending toward buyers. Seller’s markets fell from 39 to 27 over 12 months; buyer’s markets rose from 13 to 17. Of 55 balanced markets, 49 were loosening toward buyers and six tightening toward sellers.

Fox Business - Rates rose 74 basis points, from 6.66% in late August to 7.4% on Oct. 8. Higher rates slowed sales, increased inventory, and prompted sellers to offer price cuts and concessions.

Fox Business - The Midwest had 16 of the 27 seller-friendly markets. The Northeast’s seller’s markets fell from 11 to five. The South had 14 buyer’s markets and two seller’s markets; its buyer’s markets increased by three since September 2025, while seller’s markets fell from seven to two. The West went from zero buyer’s markets in June to three by September.

Fox Business - Greenville, South Carolina, and Nashville, Tennessee, were peak buyer’s markets; Hartford, Connecticut, was the sole peak seller’s market.

WHERE:

ABC News - The largest regional decline in pending sales was in the West, followed by the South, Midwest, and Northeast.

Fox Business - Bakersfield and Riverside, California, and Colorado Springs, Colorado, became buyer’s markets.

WHY:

ABC News - Rising mortgage rates and elevated home prices squeezed the housing market; higher rates reduced affordability, while some first-time buyers waited and homeowners with low locked-in rates were reluctant to move.

Fox Business - Buyers gained negotiating leverage as higher rates slowed sales and increased inventory, but that leverage did not replace the purchasing power lost to higher borrowing costs.

HOW:

ABC News - NAR’s pending-sales measure tracks signed contracts, reflecting the effect of mortgage rates on sales activity.

ABC News - Housing starts measure how many new homes builders begin constructing.

(UPDATED October 21, 2026 16:15 UTC)

The U.S. housing market is weakening as rising mortgage costs and elevated prices squeeze buyers. Pending home sales fell 7.3% in a month, reaching their lowest level since the index began in 2001, while housing starts dropped 5.2% to an annualized 1.221 million. Mortgage applications also declined 5.3% in a week, including a 7% drop in purchase applications. The average 30-year mortgage rate dipped to 7.41%, but another measure put it at 7.43%, up from Friday. Economists say affordability is stretched, and half of adults surveyed said their mortgage or rent was unaffordable. A rise in rates from 6% to 7% leaves nearly 6 million fewer people able to afford payments on a median-priced home. Higher rates are slowing sales and adding inventory, giving buyers more negotiating power, though not restoring lost purchasing power. The West saw the steepest decline in pending sales.