Last week we were talking about 7.2-7.3%….
Freddie Mac’s Primary Mortgage Market Survey put the 30-year fixed at 7.40% on October 8, up from 7.28% the week before and 6.30% a year ago. The 15-year moved to 6.73% from 6.60%, against 5.53% last October. That is the highest 30-year reading since November 2023. Sam Khater, Freddie Mac’s chief economist, used the release to remind borrowers that “shopping around for a mortgage rate” and collecting several quotes can save thousands over the life of a loan. Sound advice in any week, but especially right now.
What twelve basis points means
The Orange County Housing Report dated October 5 puts the median closed single-family price at $1,413,518. Put 20% down and you’re financing $1,130,814.
At 7.40%, principal and interest on that loan runs about $7,830 a month. At last week’s 7.28% it was $7,737. At last October’s 6.30% it was $6,999.
Twelve months of waiting cost you $830 a month — $9,961 a year, on the identical house at the identical price. Nothing about the property changed. Only the financing did.
Inventory fell. That is not good news.
The same report counts 4,987 active listings, down 74 from 5,061, the headline on that report is literally “Inventory Slips Below 5,000.”
Look at why it fell. Closings came in at 470 for the week, up from 341. But 379 listings expired or were canceled in those same seven days. Roughly four homes left this market unsold for every five that actually closed. That is not absorption. That’s sellers walking away from a number the market wouldn’t pay.
And demand kept sliding. Pending contracts fell to 1,653, down 118 from 1,771 the week before, a 6.7% drop in seven days. New listings held at 588, still well ahead of closings. The homes clearing escrow this week went under contract in early September, before rates moved up again
The price split nobody is talking about
Here’s the figure from the October 5 report that actually changed my thinking.
Homes over $2.5 million sold an average of $145,424 below list — a 2.9% gap, narrowed from 3.5% the week before. Homes under $2.5 million sold an average of $19,913 below list, a 1.6% gap that widened from 1.1%.
If this keeps up, we would see the luxury end getting stronger on price while the middle gets weaker. That runs against every headline you’ve read this month. So I am not sure that this keeps up… But it is true that people buying second homes, cash homes, etc. are less sensitive to rates. The $2M-and-up band holds 1,257 active listings at a 58-day median days on market. Still a slow market but the buyers who are showing up are paying closer to ask than they were two weeks ago.
Meanwhile the fastest part of this county remains the $1M–$2M band at a 39-day median, with 1,825 actives. Under $1 million sits at 45 days across 1,919 listings. Countywide median days on market is 46; the average is 66.
What I’d do this week
If you’re selling. Three hundred seventy-nine owners gave up last week. Don’t be number 380 in November. A canceled listing doesn’t really reset… buyers see the history, and you come back in spring competing against the same inventory with a worse story. I’d hold the line rather than cut, but you may need to change the offer you are making to buyers. That could mean price, it could mean staging, it could mean anything from a marketing perspective, depending on your situation.
If you’re buying. Rates at 7.40% hurt. With 4,987 homes listed against 1,653 in contract, you are choosing from three listings for every buyer who has committed. Ask your lender today a rate buydown and how that would look for you.
The data tells you what this market is doing. It can’t tell you whether this is your window. That is the part where you and I will actually have to chat and look at your particular situation.
Thinking about selling this fall? Start with my Orange County Seller’s Guide, or get a free, no-obligation home valuation so you’re working from a real number instead of a Zestimate.
Buying? My Orange County Buyer’s Guide walks through the whole process, start to keys.
Either way, call me and let’s talk through your specific situation.
Jaleesa Peluso | Berkshire Hathaway HomeServices California Properties
Phone: (949) 395-0960 | Book a call: calendly.com/jaleesapeluso | JaleesaPeluso.com
DRE #01935097