Weekly Housing Market Update: Mortgage Rates Ease, Boosting Buyer Sentiment

Mortgage rates eased this week even as inflation ticked up—but it’s boosting buyer sentiment across the board.

This week, mortgage rates dropped to 6.6%, and the Realtor.com® 2025 Housing Forecast anticipates lower mortgage rates by this time next year.

Improvement in mortgage rates and the outlook for lower rates ahead seems to have bolstered home purchase sentiment, which ticked up for a fourth straight month. The share of consumers who expect mortgage rates to fall was a survey-high 45%.

Lower mortgage rates are good not only for buyer demand, but also for sellers. In the Realtor.com weekly data, we saw that, despite volatility from the Thanksgiving holiday, new listings continue to edge up. Interestingly, sellers are meeting a slower-moving housing market by reducing their asking prices.

This week, consumer price inflation edged up as falling energy prices couldn’t fully offset increases in shelter and other prices. Core inflation—a measure of underlying price pressure—also rose. Producer prices showed similar upward pressure.

Despite this pickup in inflation, I still expect another quarter-point rate cut in next week’s Fed meeting. With unemployment ticking up, the Fed is likely to aim to stay on its recent path, but I do expect the projection to open the door to a much slower pace of cuts in 2025, something investors are also anticipating.

Finally, there are two top-10 lists worth taking a look at.

The first is our monthly hottest housing markets, where we highlight the areas where current demand outpaces current supply. The No. 1 hottest market in November was Springfield, MA. Among the largest markets in the country, the New York City metro area was the most improved.

The second is our Top Housing Markets for 2025. In this report, we break down the markets that are expected to see the largest increase in real estate transactions, propelled by both sales and home price growth.

In 2025, low-cost Sun Belt markets where construction has been more robust and younger populations may be more likely to take advantage of mortgage products like VA and FHA loans are expected to be the top performers. They include Colorado Springs, CO, which was No. 1 on our list.