Have higher mortgage rates already reversed housing demand?...

The Federal Reserve cut rates by 0.50% on Sept. 18 and mortgage rates and bond yields headed higher. But, we have to remember that mortgage rates had already made an almost 2% move lower since the highs of 2023 without rate cuts, as the bond market always gets ahead of the Fed.
Since the Fed rate cut, we’ve also seen significant economic data lines beat estimates: housing starts, retail sales, industrial production, GDP and labor data all came in better than expected. Mortgage rates had already reached the bottom of my 2024 forecast so the risk of rates going higher was a legitimate concern. As I have noted, once the 10-year yield gets below 3.80% we need to see weaker economic data for rates to drop and the opposite happened last week. This explains the rise in mortgage rates since the Fed cut rates.
10-year yield and mortgage rates
My 2024 forecast included:

A range for mortgage rates between 7.25%-5.75%
A range for the 10-year yield between 4.25%-3.21%

I forecast channel ranges with mortgage rates and the 10-year yield because we can all follow the economic data that matters and look for crucial inflection points with rates. This is what I call the slow dance with the 10-year yield and 30-year mortgage rates.
The strong economic data we’ve seen in the past several weeks underscore why the 10-year yield and mortgage rates rose last week. The real kicker was Friday’s jobs report, which showed that the three and six-month job creation averages are closer to my labor forecast than before.
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