{"id":13928,"date":"2025-09-18T13:34:36","date_gmt":"2025-09-18T13:34:36","guid":{"rendered":"https:\/\/zacksim.com\/blog\/?p=13928"},"modified":"2025-09-18T13:34:37","modified_gmt":"2025-09-18T13:34:37","slug":"is-the-housing-market-turning-a-corner","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/is-the-housing-market-turning-a-corner\/","title":{"rendered":"Is The Housing Market Turning A Corner?"},"content":{"rendered":"\n<p><em>Ethan P. from Raleigh, NC asks:<\/em> Hi Mitch, I\u2019ve noticed that mortgage rates have been coming down recently. Do you think the housing market could finally be turning a corner? And if so, could that help boost the economy more broadly?<\/p>\n\n\n\n<p><strong>Mitch\u2019s Response:<\/strong><\/p>\n\n\n\n<p>To put recent moves in the 30-year fixed mortgage rate in perspective, readers can consult the chart below. As you mentioned in your question, the average 30-year fixed mortgage has fallen to 6.35%, its lowest level since last October. That\u2019s down from above 7% earlier this year, and it gives buyers a bit more purchasing power.<sup>1<\/sup><\/p>\n\n\n\n<p><strong><em>30-year Fixed Mortgage Rate<\/em><\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"937\" height=\"329\" src=\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2025\/09\/image-2.png\" alt=\"\" class=\"wp-image-13929\" srcset=\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2025\/09\/image-2.png 937w, https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2025\/09\/image-2-300x105.png 300w, https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2025\/09\/image-2-768x270.png 768w\" sizes=\"auto, (max-width: 937px) 100vw, 937px\" \/><figcaption class=\"wp-element-caption\"><strong><em>Source: Federal Reserve Bank of St. Louis<sup>2<\/sup><\/em><\/strong><\/figcaption><\/figure>\n\n\n\n<p><strong><u><a href=\"https:\/\/go.steadyinvestor.com\/arrow-use-volatility-to-your-advantage?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2025_09_18&amp;content=volatility_can_be_good_guide\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/arrow-use-volatility-to-your-advantage?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2025_09_18&amp;content=volatility_can_be_good_guide\">Housing Market Shifts: How to Position Your Portfolio<\/a><\/u><\/strong><\/p>\n\n\n\n<p>Mortgage rates are easing, and many are asking if the housing market is turning a corner. For investors, shifts like this often ripple through markets in ways that create opportunity.<\/p>\n\n\n\n<p>I recommend all of our readers download our free guide, <strong><em><u><a href=\"https:\/\/go.steadyinvestor.com\/arrow-use-volatility-to-your-advantage?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2025_09_18&amp;content=volatility_can_be_good_guide\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/arrow-use-volatility-to-your-advantage?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2025_09_18&amp;content=volatility_can_be_good_guide\">Using Market Volatility to Your Advantage<\/a><\/u><\/em><\/strong>, to see how market changes, like housing shifts and policy moves, can create openings for investors. Inside, you\u2019ll learn:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>How market volatility can \u201cshake up\u201d complacent investors<\/li>\n\n\n\n<li>Potential bargains that may be uncovered through turbulence<\/li>\n\n\n\n<li>Why volatility may help prevent overheating and market \u201cbubbles\u201d<\/li>\n\n\n\n<li>What history shows us about opportunities for steady investors in turbulent markets<\/li>\n\n\n\n<li>Plus, more ways you may be able to benefit from a volatile market<\/li>\n<\/ul>\n\n\n\n<p>If you have $500,000 or more to invest, download your copy today!<\/p>\n\n\n\n<p><strong><u><a href=\"https:\/\/go.steadyinvestor.com\/arrow-use-volatility-to-your-advantage?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2025_09_18&amp;content=volatility_can_be_good_guide\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/arrow-use-volatility-to-your-advantage?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2025_09_18&amp;content=volatility_can_be_good_guide\">Download Our Guide, \u201cUsing Market Volatility to Your Advantage\u201d<sup>3<\/sup><\/a><\/u><\/strong><\/p>\n\n\n\n<p>But as seen on the chart, the move is not that big, and still puts the 30-year fixed mortgage rate well within historical norms. Even still, the decline has already sparked some activity\u2014mortgage purchase applications are up over 20% from a year ago. But this activity does not change the affordability issue in the housing market. Home prices have risen more than 50% since 2019, and higher property taxes and insurance costs continue to weigh on budgets. The reality is that even with lower rates, the market is still far from \u201ccheap.\u201d<\/p>\n\n\n\n<p>I think we need to see rates fall below 6% before we really see a pop.<\/p>\n\n\n\n<p>Your question posits whether the Fed\u2019s actions may get us there. As a point of clarification, I think the Fed\u2019s <em>expected<\/em> rate cuts have contributed to downward pressure on mortgage rates, but it\u2019s important to note that the Fed doesn\u2019t directly set these rates. The Fed controls short-term, overnight lending rates. Mortgage rates, on the other hand, tend to track longer-term bond yields, especially the 10-year Treasury, which moves based on inflation expectations, government deficits, and overall demand for U.S. debt. If tariffs or rising federal borrowing keep inflation expectations elevated, long-term rates may stay higher, limiting how far mortgage rates can fall even as the Fed eases.<\/p>\n\n\n\n<p>Lower mortgage rates are also a double-edged sword. They can stimulate demand, but that demand can push home prices higher, especially in markets where supply is still tight. And while refinancing activity could pick up for homeowners who bought in the last few years, most homeowners remain locked into much lower rates from the 2020\u20132021 period, so the boost there may be modest.<\/p>\n\n\n\n<p>As for whether a turnaround in housing could lift the broader economy, it\u2019s worth keeping perspective. Housing contributes about 15\u201318% to GDP, but most of that is \u201chousing services\u201d (like rents and utilities) that don\u2019t fluctuate much. The more cyclical piece, residential investment, including construction, remodeling, and broker fees, usually accounts for just 3\u20135% of GDP. That means housing can provide a tailwind at the margins, but it isn\u2019t typically the driver of economic cycles in the U.S.<\/p>\n\n\n\n<p>So yes, lower mortgage rates could spark a modest pickup in housing activity, and that would be welcome after several years of sluggish sales. But housing alone is unlikely to be a game-changer for the economy.<\/p>\n\n\n\n<p>Housing may offer a lift, but it won\u2019t steer the economy on its own. For investors, the real opportunity lies in preparing for the broader market shifts ahead.<\/p>\n\n\n\n<p>Download our free guide, <strong><em><u><a href=\"https:\/\/go.steadyinvestor.com\/arrow-use-volatility-to-your-advantage?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2025_09_18&amp;content=volatility_can_be_good_guide\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/arrow-use-volatility-to-your-advantage?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2025_09_18&amp;content=volatility_can_be_good_guide\">Using Market Volatility to Your Advantage<sup>4<\/sup><\/a><\/u><\/em><\/strong>, to learn how to turn uncertainty into strategic moves.<\/p>\n\n\n\n<p><strong>Inside, you\u2019ll also find insights on:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>How market volatility can \u201cshake up\u201d complacent investors<\/li>\n\n\n\n<li>Potential bargains that may be uncovered through turbulence<\/li>\n\n\n\n<li>Why volatility may help prevent overheating and market \u201cbubbles\u201d<\/li>\n\n\n\n<li>What history shows us about opportunities for steady investors in turbulent markets<\/li>\n\n\n\n<li>Plus, more ways you may be able to benefit from a volatile market<\/li>\n<\/ul>\n\n\n\n<p>If you have $500,000 or more to invest, download this free guide today by clicking on the link below.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Mortgage rates have been coming down recently. How will that impact the housing market and the economy overall?<\/p>\n","protected":false},"author":3,"featured_media":13575,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[66,71],"tags":[],"class_list":["post-13928","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mitchs-mailbox","category-private-client-group"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/13928","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=13928"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/13928\/revisions"}],"predecessor-version":[{"id":13930,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/13928\/revisions\/13930"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media\/13575"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=13928"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=13928"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=13928"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}