Mortgage rates dropped to their lowest level since April 2023 in August, falling to a daily average of 6.34 percent on Aug. 5, according to a new report from Redfin.
Rates fell after a weaker-than-expected jobs report stoked recession fears; they have since ticked up, but they're still near the lowest level in over a year.
Home prices are also falling from their peak: The median sale price was $389,750 during the four weeks ending Aug. 4, more than $6,000 below early July’s all-time high. While that’s a typical seasonal decline, the year-over-year increase of 3.2 percent is the smallest in nine months, Redfin said, indicating price growth has eased slightly.
Home sales have yet to improve as the affordability crunch eases. Pending sales are down 6.7 percent year-over-year, the biggest decline in nine months. But there are some signs that house hunters are coming off the sidelines at early stages of the homebuying process, and that pending sales could improve soon.
Mortgage-purchase applications rose slightly over on a seasonally adjusted basis. Redfin’s Homebuyer Demand Index is down 13 percent year-over-year, but that’s the smallest decline in three months. Additionally, Redfin agents reported rising interest in touring homes.
“Many of the buyers I’m working with are excited because they’ve been casually house hunting for a year, waiting for rates to come down before they make an offer. Now a lot of those buyers want to get in now, before rates get too low and cause more competition,” Redfin Premier agent Shoshana Godwin said in a release. “One of my listings, which went on the market last week, had over 100 parties come through and received nine offers. Buyers are securing lower rates than they were a few months ago, but costs are still high enough that buyers are picky. If they’re going to have a high monthly payment, they want a move-in ready home so they don't have to pay for upgrades.”
On the supply side, new listings were re-gaining some of the momentum they had lost in recent weeks. New listings of homes for sale were up 5.9 percent year-over-year, the biggest increase in five weeks.