Sellers Retreat: Delistings Hit 8-Year High Amid Home Builder Discounts

Good morning, and welcome to your Wednesday edition of HousingMarket Daily.

As we prepare to power down for the Thanksgiving holiday tomorrow, the data pouring in this week offers a complex but cautiously optimistic picture for 2026. While many industry professionals are looking forward to a turkey dinner, the market itself is serving up some surprising numbers.

Yesterday’s reports painted a picture of a sector in transition. We are seeing a stunning surge in construction starts—driven largely by megaprojects—even as builder confidence remains tempered by labor/material headwinds. On the policy front, tensions are flaring between state and federal agencies regarding housing funding, a storyline that will undoubtedly shape the regulatory landscape in the coming year. Meanwhile, mortgage rates have settled into a "new normal" range, providing just enough stability to tempt buyers off the sidelines before year-end.

Today’s issue unpacks these critical shifts, from the 21% jump in construction activity to the latest FHFA price data. Whether you are finalizing a contract today or strategizing for Q1, we have the verified insights you need.

Let’s dive into the headlines.

Mortgage Rates Hover Near 6.26% Heading into Holiday. According to the latest data, the 30-year fixed mortgage rate average is holding steady at approximately 6.26%. This stability heading into the holiday weekend offers a window of predictability for borrowers who have been navigating a volatile rate environment throughout Q4. The leveling off suggests that financial markets have priced in the recent economic signals, providing a calmer baseline for early December. View the latest rate trend data at FRED

Mortgage Rate Variability Index Signals Calm. Bankrate’s "Mortgage Rate Variability Index" is currently reading a moderate 5 out of 10, indicating that while rates aren't plummeting, they also aren't swinging wildly day-to-day. For loan officers and borrowers, this means less "rate shock" between application and closing. The index suggests that while we aren't in a full-blown rally, the volatility that characterized much of 2024 and early 2025 has subsided, allowing for more confident financial planning. Review the variability analysis at Bankrate

Refinance Activity Ticks Up as Homeowners Leverage Equity. Despite rates remaining above 6%, lenders are reporting a slight uptick in refinance applications, driven primarily by homeowners seeking to tap into record levels of equity. With home prices holding firm, many are choosing to cash out for renovations rather than move, effectively "locking in" their current tenure. This trend supports the broader narrative of a "lock-in" effect that continues to keep resale inventory tight. Read the market highlight at Empire Learning

Total Construction Starts Surge 21.1% in October. In a stunning beat of expectations, total construction starts jumped 21.1% in October to a seasonally adjusted annual rate of $1.53 trillion. The surge was propelled largely by nonresidential and "megaproject" activity, but it signals immense underlying strength in the development sector. This massive injection of capital into the built environment suggests that despite financing headwinds, developers are finding ways to pencil out large-scale projects. See the full construction report at Dodge Construction Network

Builder Confidence Stalls as Incentives Reach Record Highs. While actual construction starts are up, sentiment on the ground remains cautious. The NAHB/Wells Fargo Housing Market Index (HMI) rose just one point to 38 in November, remaining in negative territory. To combat affordability challenges, builders are heavily utilizing mortgage rate buydowns and other incentives. This divergence between high starts and low confidence highlights the aggressive measures builders are taking to maintain sales velocity. Analyze the builder sentiment data at Builder and Developer Magazine

New Construction Prices Drop in South and West. The price gap between new and existing homes is narrowing rapidly, particularly in the South and West regions. A new report shows that builders in these supply-rich markets are aggressively pricing spec homes to compete with resale inventory. In some markets, the premium for a new home has all but vanished, offering buyers a compelling alternative to older homes that may require significant renovation. Read the new construction pricing report at Realtor.com

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HUD Cuts to Permanent Housing Spark Controversy. The Department of Housing and Urban Development (HUD) has released a new Continuum of Care (CoC) funding notice that significantly reduces allocations for permanent supportive housing. The policy shift, which redirects funds toward transitional housing with service requirements, has drawn sharp criticism from housing advocates who warn it could destabilize residency for over 170,000 vulnerable individuals. This marks a major pivot in federal homelessness strategy. Read the policy breakdown at Politico

Governors Sue Administration Over Housing Funding. In immediate response to the new HUD mandates, a coalition of governors, including California’s Gavin Newsom and Pennsylvania’s Josh Shapiro, have filed lawsuits against the administration. The suits argue that the abrupt changes to funding formulas are unlawful and will cause immediate harm to state-level housing initiatives. This legal battle sets the stage for a protracted conflict between state housing agencies and federal regulators in 2026. View the official press release at CA.gov

FHFA Report: U.S. House Prices Rise 2.2% Year-Over-Year. The Federal Housing Finance Agency (FHFA) released its latest House Price Index (HPI) today, showing a 2.2% annual increase in U.S. house prices. While appreciation has cooled significantly from the pandemic boom years, the continued positive growth defies predictions of a crash. The data underscores the structural supply shortage that continues to put a floor under home values, even in a high-rate environment. Review the HPI data at FHFA.gov

Home Sales Rise in October as Buyers Seize Opportunities. Sales of previously occupied U.S. homes increased in October, rising to the fastest pace since February. The uptick in activity is attributed to a slight dip in mortgage rates earlier in the fall, which pulled some buyers off the sidelines. This resilience in sales volume demonstrates that demand remains robust whenever affordability conditions improve even marginally. Read the full sales report at AP News

Sellers Pull Back: Delistings Hit 8-Year High. In a surprising twist, as buyers step up, sellers are stepping back. New data indicates that the number of homes being delisted (removed from the market without selling) has hit an 8-year high. This suggests that many discretionary sellers are refusing to accept lower prices or pay concessions, preferring to hold onto their properties and wait for a stronger spring market. Read about the delisting trend at Real Estate News

Midwest and South Drive Sales Growth. While the national picture improves, the recovery is uneven. Recent data shows that month-over-month pending home sales rose in the Midwest and South, driven by better relative affordability. In contrast, sales in the West declined, highlighting the continued strain of high prices in coastal markets. This regional divergence is expected to deepen as buyers migrate toward value. Explore the regional statistics at NAR

2026 Outlook: Moderate Growth Expected. Looking ahead, economists are forecasting moderate gains for the housing sector in 2026. The Mortgage Bankers Association (MBA) anticipates an 8% growth in single-family origination volume, driven by a gradual increase in inventory and a wave of millennial first-time buyers. While not a boom, this steady growth projection offers a stable roadmap for industry planning in the new year. Read the 2026 forecast at MortgagePoint

Builder Discounts Hit Post-Pandemic High. In an effort to close out the year strong, the share of builders cutting prices has reached a post-pandemic high. Recent surveys indicate that 41% of builders are discounting homes, with an average price reduction of 6%. This aggressive pricing strategy reflects the urgent need to move spec inventory before the fiscal year ends, creating a temporary buyer's market in the new construction segment. See the builder discount data at Homes.com

Coalition Condemns New Funding Rules. The National Low Income Housing Coalition (NLIHC) has issued a strong statement condemning the administration's new CoC funding notice. The organization warns that the drastic cuts to permanent housing support will put thousands at risk of homelessness. This mobilization of advocacy groups signals a turbulent period ahead for public-private partnerships in the affordable housing sector. Read the coalition's response at NLIHC

As we sign off for the holiday, the narrative for the end of 2025 is clear: resilience.

The housing market has taken everything thrown at it—higher rates, political uncertainty, and affordability crunches—and is still posting gains in prices and pending sales. The tug-of-war between buyers returning to the market and sellers retreating (delistings) will be the defining dynamic to watch in December. If inventory stays tight because sellers refuse to budge, we could see a floor on prices even if demand softens slightly.

Enjoy the turkey, the football, and the time with family. We will be back on Friday to break down what Black Friday means for retail real estate. Happy Thanksgiving from the team at HousingMarket Daily.

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