The positive momentum in the mortgage market isn’t limited to refinancing — homebuying activity is also beginning to rebound. With rates easing into the 6.2%–6.4% range and affordability reaching its best level in more than two years, more buyers are stepping back into the market after months of hesitation.
Lower rates and improved affordability have prompted a modest rebound in homebuying: sales rose slightly in October 2025 despite headwinds like a federal government shutdown.
This rebound is particularly notable because it occurred during a period of significant economic uncertainty. Even with government operations partially halted and consumer confidence under pressure, buyers still responded to the declining-rate environment.
Why home sales rose despite the challenges:
1. Lower Borrowing Costs Boosted Purchase Power
Many buyers who were previously priced out of the market found that falling rates significantly improved their monthly payment projections.
2. Pent-Up Demand From Earlier in the Year
High rates throughout early 2025 forced many buyers to pause their search. As rates fell, this delayed demand began to unwind.
3. Increased Inventory and Motivated Sellers
More properties hit the market in late 2025 as sellers — aware that buyer activity was returning — sought to capitalize on improving conditions.
4. Consumers Looked Past Temporary Government Disruptions
While the federal shutdown created short-term uncertainty, buyers focused on long-term rates and affordability trends rather than temporary political volatility.
🏡 What the Rebound Means for the Housing Market Going Into 2026
The slight rise in home sales serves as an early signal that the housing sector may be stabilizing after a turbulent two years.
Here’s what this trend suggests:
- Demand is returning as affordability improves.
- Buyers are more responsive to rate changes than to short-term economic noise.
- A healthier balance between supply and demand may emerge if inventory continues increasing.
- Market confidence is strengthening, even in the face of macroeconomic challenges.
If rates continue trending downward or remain stable around the low-6% mark, homebuying activity could see a more pronounced recovery heading into 2026.