Can the housing market still grow with mortgage rates over 6.64%?
With rates near yearly highs and above 6.64%, purchase apps slipped 7% weekly and 2% yearly, but pending sales stayed ahead of 2025.
The recent surge in mortgage rates, now over 6.64%, is giving the housing market a bit of a chill. According to the latest data, purchase applications have slipped 7% on a weekly basis and 2% year-over-year. This decline is likely to have a ripple effect on the construction industry, as fewer homebuyers entering the market means less demand for new homes.
Despite this dip, pending sales are still ahead of 2025, suggesting that the housing market is not coming to a complete standstill just yet. However, the trend is worth watching, especially for construction companies that rely on a steady stream of new homebuyers to drive growth. With mortgage rates remaining high, builders may need to adjust their strategies to stay competitive, whether that's by offering incentives or revising their pricing.
Looking ahead, the big question is whether the housing market can continue to grow with mortgage rates hovering near yearly highs. Construction companies will be keeping a close eye on interest rates and their impact on homebuyer demand. If rates remain elevated, we can expect to see builders pulling back on new projects or focusing on more affordable housing options. For now, it's a wait-and-see approach, but one thing is certain: the construction industry will be closely watching the housing market's next move.
Originally reported by housingwire.com. ConstructionNews adds analysis for real estate & property readers.