Economists' Outlook

Housing stats and analysis from NAR's research experts.

Instant Reaction: Mortgage Rates, September 9, 2021

"Mortgage rates continued to remain below 2.9% for the last nine straight weeks. Specifically, according to the finance mortgage provider Freddie Mac, the 30-year fixed mortgage rate rose slightly to 2.88% from 2.87% the previous week.

With most children and students back in the classrooms, "seasonal patterns" will also be back in the real estate market. While 30% of the households have a child under 18 in their house, these buyers and sellers typically do not want to move their family in the middle of the school year and they usually wait until its end so they have more free time for moving. Thus, among other factors, every year, transactions and prices tend to be above-trend in the summer while activity typically slows down in the winter. Specifically, sales activity between February and March typically increases by 33% while prices rise by 3%. Sales continue moving upward in the following months, but it is interesting to see that the busiest home selling months are May, June, July, and August, with activity to peak in June. The average number of transactions during this four-month period is 2.1 million home sales and accounts for 40% of the annual sales volume. Then, sales typically drop by 15% between August and September. The slowest months of selling activity are November, December, January, and February. For instance, in June, we sell about 555,000 existing homes while activity falls by 83% to nearly 300,000 home sales in January.

Thus, even with historically low rates, it's normal to see the market cooling off in the following months. The National Association of REALTORS® forecasts existing home sales to drop by 10% in the last quarter of 2021."