Should You Buy Now or Wait? What the Latest Market Data Reveals
With mortgage rates declining from their recent peaks, many prospective buyers are facing a key question: Is now the time to enter the market? While waiting for rates to drop further might seem tempting, there's another factor to consider—home prices continue their upward trajectory. The strategy of locking in today's price, even if rates aren't at their absolute lowest, may prove more financially sound than waiting on the sidelines while both prices and competition increase.
Recent market data suggests that buyers are already acting on this insight, with contract signings showing their strongest performance in nearly three years.
Housing Market Gains Momentum as Mortgage Rates Decline
Recent data from the National Association of REALTORS® shows renewed activity in the housing market, with contract signings climbing as mortgage rates have decreased from their recent highs.
According to NAR's Pending Home Sales Index, contract signings increased 3.3% in November compared to October and are up 2.6% compared to the same period last year. This forward-looking indicator tracks signed contracts that have not yet closed, providing insight into future home sales trends.
Regional performance varied across the country. The West region led with a 9.2% month-over-month increase in contract signings, followed by the South at 2.4%. The Northeast and Midwest posted more modest gains of 1.8% and 1.3%, respectively. For context, the Midwest had led in October with a 5.3% increase over September.
The 30-year fixed-rate mortgage averaged 6.24% in November according to Freddie Mac, down from the roughly 7% rates seen at the start of 2025. This decline in rates has corresponded with double-digit annual increases in mortgage applications for home purchases in recent weeks.
The median existing home price reached $409,200 in November. While housing inventory showed a 6% month-to-month decline during the winter months, supply remains approximately 8% higher than a year ago, providing buyers with more options than in recent years.
NAR's Housing Affordability Index indicates that affordability conditions have improved this fall due to a combination of lower mortgage rates and median family incomes rising faster than home prices. Looking forward, NAR forecasts that mortgage rates could average 6% in 2026. Research suggests that a one percentage point drop in rates from 7% to 6% could potentially bring approximately 5.5 million additional households into the buyer pool for 2026, including 1.6 million renter households.
