According to Realtor.com Research, mortgage rates have climbed to levels we haven't seen in quite some time. The 30-year fixed rate hit 6.95% this week, marking a significant jump that's pushing back on affordability for buyers. When rates move this sharply, it changes the calculus for anyone trying to lock in financing on a property.
On the broader economic side, the Federal Reserve's second quarter data from 2026 is showing us how households and businesses are positioning their money. The Fed also made a unanimous decision to raise its policy rate, signaling that inflation remains a concern they're actively working to manage. These decisions at the national level filter down directly to what we're seeing in terms of borrowing costs.
The market itself is sending mixed signals right now. Pending home sales ticked up slightly from month to month, which is a positive sign, but when you compare year over year the picture looks softer with a meaningful decline. This tells me that while there's some activity happening, buyers are still being cautious compared to where we were a year ago.
What's interesting is the builder perspective. New residential construction is showing both hesitation and some glimmers of hope. Builders are clearly watching their costs and the mortgage environment closely before committing to new projects, but they haven't completely shut down either.
What I am seeing locally here in the Bay Area and East Bay is that these national trends are absolutely reflected in what my clients are experiencing. Higher mortgage rates combined with softer year-over-year activity means sellers need to be realistic about pricing and competition, while buyers who are still in the market have a bit more negotiating power than they did twelve months ago. The window for those on the sidelines is still open, but it requires patience and strategy.
