Signs That Times May Be Changing: Are Buyers Coming Back to the Market?

While national mortgage application data may suggest continued weakness in housing demand, a closer look reveals a more nuanced—and perhaps encouraging—story. According to the Mortgage Bankers Association (MBA), total mortgage applications nationwide declined 4.7% this week, continuing a downward trend that has defined much of 2024. Yet, beneath that headline number, there are subtle but potentially meaningful shifts taking shape at the local level.

In my own practice here in the Metro Atlanta area, pre-approval activity has spiked dramatically. After averaging three to four pre-approvals per week over the past several months, I’ve taken 15 new applications in just the last seven days—a nearly fivefold increase. Admittedly, my personal data isn’t a national benchmark, but after more than 40 years in the mortgage industry, I’ve learned that early movements in pre-approval activity often serve as a leading indicator for future purchase contracts.

Pre-approvals represent serious intent—buyers investing time, documentation, and credit inquiries to position themselves to act quickly when they find the right home. This isn’t casual interest; it’s conviction. When that number jumps meaningfully in a short span, it often signals a shift in sentiment—a psychological turning point where “waiting for rates to fall” gives way to “waiting no longer.”

Several factors likely explain this sudden surge. Chief among them is pent-up demand. Many prospective buyers have been sitting on the sidelines, hoping for mortgage rates to retreat to the mid-5% range. But with rates holding near 6.5%–7%, those expectations have gradually reset. Meanwhile, home prices have continued to rise, in some areas by 5–10% over the past two years, effectively erasing any savings those buyers might have realized by waiting. In real terms, the cost of waiting has exceeded the cost of acting.

In short, buyers appear to be recalibrating—acknowledging that today’s market, though imperfect, is still navigable and opportunistic for those who act strategically. If this trend in pre-approvals continues, it could mark the early stages of renewed buyer engagement heading into the winter months, a traditionally slower season that may surprise on the upside.

While it’s too early to call this a full-fledged rebound, the recent data—both national and local—suggests that buyer psychology is shifting from hesitation to participation. And that, in the housing market, is often how recoveries begin.