Home sales on ice

October 23, 2025

September data for sales of newly built homes, which are recorded at the contract signing and help give a real-time snapshot of housing activity, are not available due to the government shutdown. However, existing home sales (which are recorded at the contract closing and reflect activity from a few months ago) were released by the National Association of Realtors for the month; sales increased 1.5% from a month ago and 4.1% from a year ago. All-cash purchases continued to rise, capturing 30% of sales. Mortgage rates continue to fall, with the 30-year fixed mortgage rate sitting below 6.5% for the sixth consecutive week.

Mortgage applications to purchase a home were up 20% from a year ago in mid-October while applications to refinance shot up 80% in the same period. Refinance applications are trending around the same level as 2022, before mortgage rates jumped. Mortgage rates remaining between 6-6.5% into year-end could help some sidelined buyers who were looking for a break in rates before getting into the market, but affordability remains constrained while availability of entry-level homes is low.

The share of buyers who think this is a good housing market to buy into remain near post-pandemic lows at 27%. The share of homeowners who think this is a good time to sell has come off its peak but is still high at 57%. Many homeowners remain frozen in place due to being locked into sub-5% mortgage rates or having paid off their house entirely; about 70% of current owners have a rate of 5% or lower. This slows down housing churn, which spills over into other sectors like furniture, appliances and car purchases.

Student loan delinquencies are spiking, with second quarter data showing 13% of student loans transitioning into serious delinquency. This share is expected to rise. The median age of a borrower in delinquency is 40; the median age of a first-time homebuyer is 38. These borrowers have seen significant deterioration in credit scores and ability to access credit at a time when they are most likely to be entering the housing market.

Separately, home builders are still feeling pessimistic about current housing conditions but the sentiment index for the month of October captured a sharp increase in optimism over future sales expectations. The National Association of Home Builders estimates a 3% increase in September housing permit applications due to this renewed optimism. (Housing starts and permits data for September were also not released due to the government shutdown.)