He cautioned, however, that rates are unlikely to return to the ultra-low 3% levels seen during the pandemic, citing the influence of inflation, Treasury yields, and federal borrowing.
Mortgage application activity has already begun to pick up, with the Mortgage Bankers Association reporting a 31% year-over-year increase in purchase applications in the latest week.
Mortgage applications for new homes fell in October, but annual sales pace reached its strongest level in over a year.
“Mortgage applications have been consistently above last year, implying that people’s desire to enter the market has been consistently positive,” Yun said.
Mortgage applications increased 0.6% from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending November 7, 2025.https://t.co/LkJuaxIsA0
— Mortgage Professional America Magazine (@MPAMagazineUS) November 12, 2025
Market divides widen as first-time buyers struggle
Despite the upbeat outlook, the recovery is expected to be uneven. “The upper end of the market has been doing much better than the lower end,” Yun said, pointing to robust inventory and strong financial markets driving activity in the $750,000 to $1 million range.