Housing inventory

Despite rising consumer confidence in the housing market, declining mortgage rates, alone, don't seem to be able to lure home buyers in, two new reports find.

Buyers aren't necessarily responding to greater inventory and lower mortgage rates.

New single-family home sales decreased 4.7% last month to an annualized rate of 716,000 after rising at the fastest pace since early 2022, government data showed Wednesday.

Residential markets are set to gain momentum again with prices rising over the next few quarters as rising rents in cities support demand, according to Holzhey. 

U.S. housing starts bounced back in August after tumbling a month earlier, illustrating uneven residential construction as builders weigh inventory levels against brighter demand prospects tied to falling borrowing costs.

Confidence among U.S. home builders rose in September for the first time in six months, just before the Federal Reserve is expected to cut interest rates from the current two-decade high.

Asked about inflation risks ahead, she pointed to the impact of housing on the consumer price index, describing it as the "stickiest piece." Stripping out housing, the U.S. consumer price index is only rising about 1.8%, she said.

Homeownership affordability reached its lowest since at least 2006 in October, and still hovers near that level, according to an index from the Federal Reserve Bank of Atlanta.

Subsidies for first-time homebuyers, such as the one proposed by Democratic Presidential nominee Kamala Harris, will only stoke demand and exacerbate the crisis, writes the chairman of Whalen Global Advisors.

While listings are ticking up, house hunters are still struggling to find affordable properties. But thanks to high mortgage rates, there aren't enough buyers in the market to create the level of competition that would drive prices up more significantly.