Zillow Economist Gives Somber Outlook on Housing Market, Mortgage Rates
Summary
Zillow reported that newly pending U.S. home sales fell 17% in October from a year earlier, the largest annual drop since 2023. Its chief economist said sales could weaken further in November, while high mortgage rates and housing costs continue to pressure affordability. Zillow expects mortgage rates to stay above 7% through the rest of 2026 and into mid-2027, though lower rates could support a recovery in sales next year.Key Facts
- Newly pending home sales fell 17% year over year in October, according to Zillow.
- Zillow chief economist Mischa Fisher said November could be the weakest month before the pace of decline eases into the new year.
- Freddie Mac reported an average 30-year fixed mortgage rate of 7.18% on November 5, down from 7.24% the week before.
- The 30-year fixed mortgage rate was 6.22% one year earlier, according to Freddie Mac.
- Zillow said the typical U.S. home value fell 0.6% from September to October but was 0.7% higher than a year earlier.
- Zillow estimated the monthly mortgage payment on a typical U.S. home at $2,004 in October, assuming a 20% down payment and excluding taxes and insurance.
- That estimated payment was 12.8% higher than a year earlier and 4.8% higher than September, Zillow said.
- Zillow forecast mortgage rates would remain above 7% through the rest of 2026 and into mid-2027.
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