Mortgage Market Update: Steady Rates and Easing Inventory Bring Cautious Optimism

After last week’s uptick, average 30-year mortgage rates have held steady around 6.60%. It’s worth noting just how far we've come—in October 2023, mortgage rates peaked at a staggering 8.03%. Since then, rates have moderated significantly, a welcome change for today’s buyers.

Current Fed Policy and Upcoming Rate Cuts

Today, the Federal Funds Rate stands in a range of 4.75%–5.00% following a recent 50 basis point cut. The next Federal Open Market Committee (FOMC) meeting on November 7 has a 90% probability of a 25 basis point rate cut and a 10% chance of holding steady. This probability has ticked up recently, underscoring the Fed’s commitment to loosening policy gradually. And looking forward to the December 18 FOMC meeting, markets show a 74% likelihood that rates will be a full 50 basis points below current levels by year-end. If cuts continue, they could drive further stability in mortgage rates—potentially easing the market’s affordability challenges.

Easing Supply Constraints and Market Shifts

It’s not just rates making headlines; housing inventory is also shifting. After years of constrained supply, inventory levels have begun to recover. In early fall, active listings were up 20% from a year ago—a significant jump but still about one-third below pre-pandemic levels. As job changes, life events, and increased mobility gradually lead more owners to sell, we’re likely to see inventories continue their slow, steady increase.

Lawrence Yun, Chief Economist at the National Association of Realtors, put it well: “A market requires both sellers and buyers. The passage of time means more inventory, as life changes drive more listings.” With increased inventory, buyers could face slightly less competition and gain a bit more leverage in negotiations—particularly if these inventory trends continue.

Buyer-Favorable Markets Emerging in Southern Metros

Across the country, we’re beginning to see a slight shift in market dynamics. According to Zillow Economist Skylar Olsen, active inventory is lifting the pool of available homes, easing competitive pressures in several metro areas. While the nationwide market remains relatively neutral, some Southern metros—like Atlanta—are beginning to shift toward buyer-favorable conditions. In fact, 10 of the 50 largest U.S. metros are now considered buyers’ markets, all located in states like Florida, Georgia, Texas, Tennessee, or Louisiana.

Key Takeaways

For anyone considering buying or selling in the coming months, these trends are critical to watch. With mortgage rates stabilizing, inventory levels rising, and regional markets tipping toward buyers, we’re seeing the housing market gradually inch toward balance. While it may take time for these shifts to fully materialize, the outlook is growing increasingly favorable for those waiting on the sidelines.

As always, if you have any questions about the market or want help navigating these changes, don’t hesitate to reach out. Here at Digital Realty US, we’re here to guide you through each step with expert insights and local market knowledge.