The U.S. housing economy

Freddie Mac's thirty-year fixed rate averaged 7.18% in the week of Nov. 5, 2026, 0.22 percentage point lower than four weeks earlier. Over the past year it ranged from 5.98% to 7.40%. The Federal Reserve's last target change, effective Sept. 17, 2026, was a 0.25 percentage point increase; mortgage rates have risen 0.23 percentage point since.

Why it matters. Mortgage rates track the ten-year Treasury yield rather than the Federal Reserve's overnight rate, so a Fed move does not pass straight through to what buyers pay. The rate on the day a buyer locks sets the payment. When mortgage rates fall, more buyers can afford a given list price, which widens the pool for sellers; when they rise, that pool shrinks.

Through Nov. 5, 2026, the thirty-year fixed mortgage rate averaged 7.18% for the month, 2.28 percentage points above the ten-year Treasury yield of 4.90%. The gap was 0.14 percentage point wider than a year earlier. It was 0.59 percentage point above its 2010–2019 average of 1.69 percentage points. The spread peaked at 2.97 percentage points in June 2023.

Why it matters. Lenders price mortgages off the ten-year Treasury yield plus this spread, so the gap moves what buyers pay even when Treasury yields do not move. When the spread widens, mortgages cost more and fewer buyers qualify at a given price, which narrows the pool for sellers; when it narrows, borrowing gets cheaper and more buyers can bid.

New single-family home sales ran at a seasonally adjusted annual rate of 676,000 in September 2026, 2.8% below a year earlier on a three-month basis. At that pace, the new homes for sale represent 8.4 months of supply, compared with 8.2 months a year earlier. Supply has averaged 6.8 months since 2016.

Why it matters. When builders carry more new homes than usual, they lean on incentives such as mortgage-rate buydowns to move them, and those offers compete directly with resale listings: buyers gain room to negotiate on new construction, and sellers of existing homes price against the builders' concessions. When builders carry fewer, sellers face less of that competition and buyers have fewer new-build options to weigh.

Builders started single-family homes at a seasonally adjusted annual rate of 859,000 in September 2026, and homes in buildings with five or more units at 349,000. Over the past three months, compared with the same months a year earlier, single-family starts ran 1.3% lower and five-plus starts 9.2% lower. Completions ran at an annual rate of 1.19 million, 17.1% below a year earlier. Five-plus starts remain 44.5% below their pandemic-era peak in November 2022.

Why it matters. Starts are the supply that reaches the market months later; completions are what adds to it as homes finish. When single-family starts rise, sellers of existing homes face more new-construction competition down the road; when they fall, less of it arrives. A steady stream of completions gives buyers more choice in the near term.

Single-family starts in the three months through September 2026 were 1.3% below the same months a year earlier. Starts have trailed their year-earlier level for 23 consecutive months.

Why it matters. Housing is one of the first parts of the economy to turn, because builders react quickly to mortgage rates and demand. When single-family starts fall, fewer new homes reach the market later, which leaves buyers fewer new-build options and sellers of existing homes less competition from builders; when starts rise, the reverse holds.

FHFA's all-transactions index for the U.S. in the second quarter of 2026 was 3.0% above its level a year earlier. Since 1976, prices have risen an average of 5.1% a year. That is the weakest reading since the first quarter of 2013.

Why it matters. Long-run context guards against reading every slowdown as the start of a price decline: nationwide declines have been rare and have clustered around recessions, the shaded bars. When appreciation slows, sellers have less room for a list price to run ahead of recent sales and buyers feel less pressure to stretch; when it speeds up, buyers compete harder.

FHFA's house price index for the second quarter of 2026 was below its level a year earlier in 46 of the 385 metro areas tracked here. That put the share of metros with prices below a year earlier at 12%. A year earlier, prices were falling in 5% of them. That is the largest share since the third quarter of 2023.

Why it matters. National price indexes average over very different markets, and breadth shows whether softness is spreading. When softness spreads across more metro areas, more sellers meet buyers looking for a discount, and recent comparable sales carry more weight than older ones; when it recedes, buyers have less room to negotiate.