Mortgage Applications Continue to Fall Despite Near-Year Low Rates

National homebuying demand remains weak despite mortgage rates hovering near the lowest levels of 2025, as economic uncertainty and job market concerns continue to weigh on potential buyers.

For the week ending October 31, overall mortgage applications decreased 1.9%, with purchase applications down 1%, according to the Mortgage Bankers Association. The 30-year fixed-rate mortgage averaged 6.22% as of today, November 6, according to Freddie Mac, a slight increase from 6.17% the previous week but still attractive compared to rates earlier in the year. This slowdown in the housing market could impact broader economic growth as the sector cools.

Economic uncertainty, particularly stemming from the ongoing government shutdown, is a key factor. “The recent government shutdown has weighed on buyer sentiment, particularly in federal-heavy markets and metros tied closely to public-sector employment,” said Hannah Jones, senior economic research analyst at Realtor.com. Builders are responding by offering incentives; D.R. Horton is offering 3.99% mortgages and has reduced average selling prices by 3% in the past year, while Lennar has offered incentives worth over $60,000. Despite this, home prices continued to rise in 77% of metro markets in the third quarter, according to the National Association of Realtors, with the Northeast experiencing the largest year-over-year increase at 6%.

Conflicting jobs reports add to the confusion, with ADP reporting a rise of 42,000 private sector jobs in October, while Challenger, Gray & Christmas indicates over 1.1 million layoffs so far this year, including over 150,000 in October alone. The lack of official government data, due to the shutdown, is making it difficult to assess the true health of the economy; you can find more information about economic indicators at the Bureau of Economic Analysis. Officials say both the Federal Reserve and the housing market are proceeding cautiously, awaiting clearer economic signals.

Inventory is also declining as sellers postpone listing properties until the new year, further contributing to the current market conditions.