Demand for housing is high but supply continues to weaken across much of the nation and is well below 2015 levels. While homebuilders ramped up production in October, overall construction is still well below historical norms. Builders cite the high costs of land, labor and regulation as barriers to increased volume.
"Many of the successful shoppers in October likely had to move fast and outbid others for the few listings available in the affordable price range," said Lawrence Yun, chief economist for the NAR. "Those obtaining a mortgage last month were likely the last group of buyers to lock in a rate near historically low levels now that rates have marched to around 4 percent since the election."
Mortgage rates are showing no signs of easing, and future sales may already be impacted. Mortgage applications to purchase a home jumped after the first rate spike post-election, as buyers on the fence moved quickly to buy, leery of even higher rates. Last week, however, applications flattened, and word from real estate agents of weaker demand are surfacing.