Friday Recap: Rates Dip to 7.32%, Pending Sales Hit a Record Low, and MLSs Sue Compass

The theme this week is relief, with an asterisk. Mortgage rates finally came down for the first time since August, and the 10-year Treasury yield dipped below 5%. But the contracts that didn't get written in September are already showing up in the data: pending sales just hit a record low, and builder confidence is the weakest it's been since 2012.

Meanwhile, the fight over how listings get marketed went to court in a big way, Washington is asking regulators to look at how portals route buyers, and there's a new earnest money scheme you need to know about. Here's what matters and what to do about it.

1. Mortgage Rates Finally Drop, to 7.32%

Freddie Mac's weekly survey, released today, put the 30-year fixed at 7.32%, down from 7.40% last week but still well above 6.19% a year ago. The 15-year fixed eased to 6.68% from 6.71%. Real Estate News notes it's the first weekly decline since August and the biggest one-week drop since July.

The Mortgage Bankers Association's survey, out Wednesday, had the 30-year conforming rate at 7.41%, down from 7.50%. Even so, total applications fell 5.3% for the week, and purchase applications were down 7% for the week and 18% below a year ago. Looking ahead, the Fed meets October 27-28. According to Real Estate News, CME FedWatch shows a 95% chance of a hold next week, but nearly a 75% chance of a hike in December.

Read more: Freddie Mac · MBA

What it means for you: One down week is not a trend, and with a possible December hike on the table, don't promise anyone rates are headed lower. But it is a real reason to call the buyers who went quiet in September. They've had nothing but bad rate news for weeks, so lead with what changed and get them back in front of their lender to rerun the numbers:

"Quick update: rates finally came down this week, the first drop since August. It's not a huge move, but on your price range it could make a difference in the monthly payment. Want me to have [lender] rerun your numbers so we know exactly where you stand?"

(As always, vet the script and make it your own.)

2. Pending Sales Hit a Record Low, and Builders Are Cutting Prices

NAR's Pending Home Sales Index fell 7.3% in September to 66.0, which HousingWire reports is the lowest reading in the index's history. Pending sales were down 11.3% from a year ago and fell in all four regions, with the West down the most (9.2% for the month, 15.0% for the year). NAR's Lawrence Yun said conditions weakened "due to fast-rising mortgage rates."

Builders are feeling it too. The NAHB/Wells Fargo Housing Market Index dropped 3 points to 29 in October, the lowest since June 2012. 43% of builders cut prices, the highest share since at least 2020, with an average cut of 6%, and 65% offered sales incentives. Census data showed September housing starts down 5.2% to a 1.22 million annual pace.

Read more: NAR · NAHB

What it means for you: Fewer contracts today means fewer closings in December and January, so look at your own pipeline now and fill the gap with more conversations this week, not next month. And if you've been steering clear of new construction, rethink that. With nearly two-thirds of builders offering incentives, your buyers may be leaving money on the table. Know which local builders are offering what, and have your buyers compare any builder financing incentive against a quote from their own lender. Our How to Negotiate a Better Deal for Your Buyers post has the playbook.

3. National Prices Slip, But Affordability Isn't Getting Better

ATTOM's third-quarter affordability report put the national median sale price at $368,000, down 2% from a year ago. That didn't help much: median-priced homes were unaffordable for average wage earners in 98% of U.S. counties, because higher rates and inflation ate up the savings. Other measures are flat to slightly up (Redfin estimates +0.2%, Zillow +1.2%), and Compass's Mike Simonsen says pending sale prices are running about 1.2% below last year.

Read more: Real Estate News on ATTOM · Real Estate News

What it means for you: Sellers hear "prices are flat" and assume last spring's number still works. It doesn't, because buyers are pricing in a 7%+ payment. Have the pricing conversation early and with fresh local data, and if a listing has been sitting, don't wait for the seller to bring it up. Our Price Cut Conversation post walks you through it. Something like:

"Prices in our area haven't fallen off a cliff, but buyers' budgets have shrunk because of rates. The homes that are selling are priced for today's payment, not last spring's. Let's look at what's gone under contract in the last 30 days and make sure we're in that range."

4. The Compass vs. MLS Fight Heads to Court

On October 16, Compass sued California's CRMLS, one of the nation's largest MLSs, in federal court, alleging its rules are anticompetitive and saying it will cover fines for its agents who market homes outside CRMLS at a client's direction. Then on October 21, six MLSs representing more than 120,000 professionals (ARMLS, BridgeMLS, Canopy MLS, Doorify MLS, Hive MLS and REcolorado) jointly sued Compass in New York, asking a judge to declare that their cooperation rules are legal and to bar Compass from suing them. New York's OneKey MLS also publicly rejected Compass's demands this week.

At the center of it all: whether a brokerage can publicly market a home without putting it in the MLS. Compass frames it as seller choice; the MLSs say it lets one brokerage use the cooperative for its buyers while holding back its own listings. These are competing claims in early-stage lawsuits.

Read more: Real Estate News on the MLS suit · Real Estate News on Compass v. CRMLS

What it means for you: Whatever your brokerage, your MLS's current rules are the ones you have to follow today, and the fines are real. Know exactly what your MLS allows for office exclusives, coming-soon and pre-marketing, and when a listing has to be submitted. If a seller asks to keep their home off the MLS, walk them through the trade-offs in plain terms and document their decision in writing. When in doubt, talk to your managing broker before you market anything.

5. Senators Ask the FTC to Look at How Portals Route Buyers

In a letter dated October 15, Sens. Elizabeth Warren and Cory Booker asked FTC Chairman Andrew Ferguson to investigate practices in online real estate. They flagged "contact agent" buttons that send buyers to platform-affiliated agents who share their commission with the platform without telling the buyer, agents being required to send buyers to affiliated lenders, and the growth of private listings. The letter doesn't name companies in the body, but Inman reports Zillow, Compass and Redfin appear in its footnotes.

Read more: Inman

What it means for you: A letter isn't an investigation, and nothing changes today. But the direction is clear: regulators are paying attention to anything a consumer doesn't know about how they got connected to you or your lender. Get ahead of it. If you pay a referral fee on a portal lead, or you have any relationship with a lender you recommend, make sure it's properly disclosed, and always give clients more than one lender option. Your managing broker or a real estate attorney can confirm what disclosures your state and federal rules require.

6. Watch for the Oversized Earnest Money Scam

HousingWire reports on a scheme a Kentucky broker ran into: a referral buyer offered full price in cash with a 5% earnest money deposit (she says about 1% is typical), sent proof of funds as a screenshot days later, then kept delaying the deposit until the sellers walked. A retired Secret Service agent told HousingWire the likely goal is to get a "refund" by check, which gives the fraudster clean funds to use.

Read more: HousingWire

What it means for you: In a slow market, a full-price cash offer with a big deposit feels like a gift. Slow down anyway. Meet buyers in person, verify proof of funds and approval letters directly with the bank or lender, make sure names and addresses match across documents, and be wary of buyers who ask almost nothing about value. If something feels off, loop in your managing broker and title company before money moves, and never let anyone talk you into refunding a deposit outside the normal escrow process.

In Closing

A week of lower rates won't undo a slow fall, but it does give you something good to say, and that's a reason to pick up the phone. Call the buyers who paused, help your sellers price for today's payment, know your MLS rules cold, and protect your clients from the deals that look too good to be true. The agents who stay in front of people now are the ones with a pipeline when the market turns. Stay consistent, and we'll see you next Friday.

Onward and upward!