There was good news Wednesday for millions of beleaguered American renters: Mortgage rates in the US fell the most in a month.

I’ll employ the usual (which is to say by-now-clichéd) sarcasm: Can you feel the savings?!

You can now finance a nondescript wooden box which, if you’re lucky, will have brick veneer on the street-facing side, for just 6.77%. (Terms and conditions apply. Your results may vary.)

The average 30-year fixed on the MBA’s gauge is now below 6.80% for the first time since way back last month.

Treasury yields of course fell last week, as downbeat US jobs data and Adriana Kugler’s resignation overshadowed Jerome Powell’s hawkish press conference for the purposes of rate-cut expectations.

Mortgage rates follow longer-dated US government borrowing costs, not the front-end of the Treasury curve, nor Fed funds, as the Trump administration sometimes suggests in the course of deriding Powell. So, during weeks when Fed cut pricing’s responding to rising recession odds (as it was last week), mortgage rates may well move lower as 10-year yields price a downturn. But that pretty quickly becomes an exercise in question-begging: If the context is home-buying, does the foreboding read-through of a decelerating labor market not offset the drop in financing costs?

Anyway, both refis and purchases were up over the week, according to the MBA’s measures. On an unadjusted basis, the purchase index is 18% higher compared to this time last year. “Purchase activity continue[s] to lead 2024’s pace, as increasing for-sale inventory of homes has been supporting home-buying,” Joel Kan said Wednesday, before cautioning that “recent weakness in the economic environment has deterred some prospective homebuyers.”

A weaker economy isn’t the only deterrent. The fact that prices are on par with a Purosangue doesn’t help. The figure below’s updated with the latest numbers from Redfin.

The median price in July was $447,035. The imbalance between buyers and sellers is now 508,715 nationally, which is to say there are more than half a million more sellers than buyers. At the height of the pandemic housing boom, that imbalance was nearly 900,000 in the other direction.

Ostensibly anyway, the imbalance as it stands today bodes very well for buyers, as does rising supply, but the problem, as ever, is that regular people don’t finance half a million dollars at 7%. That’s not something the typical American family should be asked to do.

Earlier this week, Redfin’s Dana Anderson said that thanks to the modest pullback in rates, a homebuyer on a $3,000 monthly budget gained some $20,000 in purchasing power since rates peaked in May. But that’s not nearly enough to move the needle.

On Wednesday, while editorializing around a handful of markets where affordability’s improving, Lily Katz noted that homebuyers in America need to earn more than $112,000 a year to comfortably afford the median home. That metric’s still rising nationally (albeit just barely) and it’s problematic for one simple reason: The typical household doesn’t make $112,000. Not even close. It’s more like $85,000.

I’ve said it before, and I’ll say it again: A situation where the typical household can’t afford the typical house isn’t sustainable without some form of social unrest. Because housing’s like food in not being optional. You want it, sure. But you also need it. For context, that figure — the $112,000 figure cited by Katz — was just $40,000 a dozen years ago.

Oh well. It’s like Marie Antoinette said: “Let them eat Snickers minis from the complimentary candy bowl at the leasing office.”