IThe housing market continues to show that affordability remains the primary challenge.

September existing-home sales increased just 1.5% to a seasonally adjusted annual pace of 3.99 million homes, but activity remains near the slowest levels we've seen since sales collapsed in 2022. Higher mortgage rates continue to limit how many buyers can qualify for a home. *

At the same time:

-National housing inventory increased 4.6% year-over-year. *

-Homes are taking longer to sell, with median days on market rising to 33 days. *

-Sellers are facing increasing pressure to offer concessions or reduce prices. *

-Home prices are still rising nationally, but only modestly, up 1.3% yr-over-year. *

For Austin, the implications are similar to what we've been discussing for months. Higher financing costs continue to weigh on affordability, but buyers benefit from better inventory levels, more negotiating power, and more opportunities for concessions than during the pandemic housing boom.

My takeaway is that this week's improvement in rates is encouraging, but it's too

early to call it a trend.

The same article that explains the rally also cautions that we've seen similar bond-market recoveries before, only to watch rates resume moving higher afterward. In other words, this could be the beginning of a larger improvement in rates, or it could simply be a temporary correction after rates reached extreme levels. *

For meaningful and sustained improvement in mortgage rates, investors still need confidence that inflation is moving lower over time and that long-term economic risks are moderating. One good week is a welcome development, but it doesn't fully change the broader picture yet. *