Forget the politics for a second.
Two numbers run the whole housing market. The first is the mortgage rate, and the second is the price.
Right now both are working against buyers. And that combo, not any one policy, is the real story.
The 30-year fixed mortgage rate was 6.53% in late May. That is a bit lower than the 6.89% buyers faced a year ago.
It sounds like progress until you zoom out. Rates have now sat above 6% for about four years.
A whole wave of buyers got used to one idea. They thought cheap loans below 5.5% would come back.
So far, they have not. The 15-year loan tells the same story, sitting near 5.87%.
Rates were not always this high. During the pandemic, they fell to record lows, and millions of buyers locked in loans near 3%.
That is the rate people now compare everything to. Next to a 3% loan, today's 6.53% feels brutal.
There is a sliver of good news. Pay is now growing a little faster than home prices, which helps buyers at the margin.
To see what high rates and high prices mean for your money, Market Briefs explains it each weekday morning, plus a free investing masterclass when you sign up.
Here is the tell. Pending home sales are the deals signed but not yet closed.
They have climbed three months in a row. That is a market holding its breath.
The demand is there. It is parked on the sidelines, waiting for rates to slip enough to make the math work.
So the buyers have not left. They are just frozen in place until the math changes.
Freddie Mac reads the three-month climb the same way. It says the demand is real and ready, just waiting on cheaper loans.
That is good news hiding in plain sight. The buyers are coiled, not gone.
Mortgage rates do not follow the Fed in a straight line. They track longer-term bonds and how lenders read the economy.
So the Fed can cut its own rate and watch mortgage rates barely move. In fact, the Fed cut its rate more than once over the past two years.
Mortgage rates stayed high anyway. That gap is exactly what has stung buyers.
Lenders also build in a cushion for risk. That keeps the home loan rate well above the safe government rate.
They keep waiting for relief. It keeps not showing up.
A year ago the rate was 6.89%, so the drop has been small and slow. At this pace, relief is more of a trickle than a wave.
Freddie Mac posts the new average every Thursday. Until it breaks well below 6%, the buyers on the sidelines will likely stay put.
For a plain-English market read every morning, sign up for Market Briefs and get a 45-minute investing course as a free bonus.
