If you’re keeping track at home (or at “home,” with scare quotes, if you’re a renter), US mortgage rates just fell for a third consecutive week.

At 6.67%, financing costs are now the lowest since late October.

Recall that rates rose pretty much unabated in the weeks following the September FOMC meeting, causing consternation and more than a little confusion among legions of would-be American homeowners, who didn’t realize the steady decline in rates leading into the first Fed cut was in part the market preemptively pricing the onset of policy easing.

Bond yields are well off local highs amid generally stable US macro data, and that’s translating into more relief for Americans struggling to make the math work on a home purchase.

Application activity rose 5.4% over the last week, and as MBA VP Joel Kan noted Wednesday, purchase apps “have shown annual gains in all but one week over the past three months… supported by sustained housing demand and inventory that continues to grow gradually in many markets.” Refi activity jumped 27% from the previous week in Wednesday’s release.

Americans are at least walking around in houses they’d like to buy. According to Redfin’s “Homebuyer Demand Index” — which measures house tours, among other things — “early-stage home-buying activity” is the most robust since September 2023. (The data’s seasonally adjusted, which I suppose means it accounts for the fact that December isn’t exactly prime time when it comes to buying and selling single-family homes.)

Dana Anderson said buyers are “coming out of the woodwork.” Why? Well, two reasons. First, the election’s over. “Many people were waiting for the election to pass before getting serious about buying a home,” Anderson wrote. Second, buyers are by now resigned to what she called “elevated” mortgage rates. “Many have accepted [that rates] are unlikely to come down anytime soon,” she went on.

I say this all the time, and I feel a little bad about it, but it’s true: Mortgage rates aren’t actually high in a historical context. They’re just high in the context of recent history which, if you’re a late-twenty, early-thirtysomething, is the only frame of reference you have.

The figure above makes the point. Current rates are right in the middle between the post-GFC/pre-pandemic average and the pre-Lehman average.

I’m in the camp who thinks the problem’s prices, not necessarily rates. It’s not unreasonable to charge 7% to loan someone earning the median household income half a million dollars over 30 years. It is unreasonable, though, to demand that everyday people find half a million dollars just to put a roof over their head.

For what it’s worth, Redfin’s 2025 outlook suggests the median sale price for homes in the US will rise 4% next year. “We don’t expect there to be enough new inventory to meet demand,” chief economist Daryl Fairweather remarked.