Redfin Reports Homebuyers Aren’t Yet Reacting to Lower Mortgage Rates, With Pending Sales Posting Biggest Year-Over-Year Decline in 9 Months
Monthly housing payments have dropped to their lowest level in four months, but homebuyers and sellers aren’t yet reacting. In addition to pending home sales falling, new listings posted their smallest increase in three months.
SEATTLE--(BUSINESS WIRE)-- (NASDAQ: RDFN) — The median U.S. monthly housing payment was $2,667 during the four weeks ending July 28, its lowest level since March. That’s according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.
Payments are declining because mortgage rates and sale prices are falling: The weekly average mortgage rate is 6.78%, down from May’s five-month high of 7.22%. The median home-sale price is $392,563, down nearly $4,000 from its early July peak (that’s a typical seasonal decline and not a signal that prices are falling unexpectedly).
Despite improving affordability, pending home sales are down 5.7% year over year, the biggest decline in nine months, and mortgage-purchase applications are down 14% (purchase applications are down 2% week over week). That’s largely because even though it’s more affordable to buy a home now than it was in the spring, prices and payments are still near record highs. Additionally, Redfin agents report that some prospective buyers, wary of political uncertainty, are waiting until after the presidential election to purchase a home.
Another reason for dwindling sales is a lack of desirable listings. New listings are up 4% year over year, but they’re losing momentum; that’s the smallest increase since November. And nearly two-thirds of homes for sale have been sitting on the market for at least 30 days without going under contract, indicating that many of today’s listings don’t match the wants and/or needs of house hunters. Much as pending sales are declining partly due to new listings losing steam, the slowdown in new listings is partly due to limited demand.
But Redfin agents report that there is plenty of demand for turnkey homes in desirable neighborhoods, and some expect sales to pick up soon as mortgage rates come down.
“Local buyers are still worried about affordability, especially since wages haven’t caught up with home-price growth and inflation has cut into their budgets. But now that rates are declining, some fence-sitters are getting off the fence,” said Boise, ID Redfin agent Nicole Stewart. “I’m working with some buyers who need larger homes to accommodate growing families, some who are relocating from California, Washington or Oregon, and some who are taking advantage of all the new builds in our area.”
For Redfin economists’ takes on the housing market, please visit Redfin’s “From Our Economists” page.
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Indicators of homebuying demand and activity |
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Value (if applicable) |
Recent change |
Year-over-year change |
Source |
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Daily average 30-year fixed mortgage rate |
6.78% (July 31) |
Lowest level since February; down from 7.14% a month earlier |
Down from 7.04% |
|
|
Weekly average 30-year fixed mortgage rate |
6.78% (week ending July 25) |
Down from 7.22% in early May |
Down slightly from 6.81% |
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Mortgage-purchase applications (seasonally adjusted) |
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Decreased 2% from a week earlier (as of week ending July 26) |
Down 14% |
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Redfin Homebuyer Demand Index (seasonally adjusted) |
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Essentially unchanged from a month earlier (as of week ending July 28) |
Down 14% |
Redfin Homebuyer Demand Index, a measure of requests for tours and other homebuying services from Redfin agents |
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Touring activity |
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Up 16% from the start of the year (as of July 28) |
At this time last year, it was up 10% from the start of 2023 |
ShowingTime, a home touring technology company |
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Google searches for “home for sale” |
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Up 4% from a month earlier (as of July 29) |
Down 19% |
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Key housing-market data
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U.S. highlights: Four weeks ending July 28, 2024 Redfin’s national metrics include data from 400+ U.S. metro areas, and is based on homes listed and/or sold during the period. Weekly housing-market data goes back through 2015. Subject to revision. |
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Four weeks ending July 28, 2024 |
Year-over-year change |
Notes |
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Median sale price |
$392,563 |
4.1% |
$3,912 below all-time high set during the 4 weeks ending July 7 |
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Median asking price |
$400,225 |
5% |
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Median monthly mortgage payment |
$2,667 at a 6.78% mortgage rate |
4% |
Lowest level since March; $168 below all-time high set during the 4 weeks ending April 28 |
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Pending sales |
79,855 |
-5.7% |
Biggest decline in nearly 9 months |
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New listings |
90,940 |
4% |
Smallest increase in nearly 9 months |
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Active listings |
989,047 |
18.7% |
Smallest increase in 3 months |
|
Months of supply |
3.8 |
+0.8 pts. |
4 to 5 months of supply is considered balanced, with a lower number indicating seller’s market conditions. |
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Share of homes off market in two weeks |
37.6% |
Down from 44% |
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Median days on market |
33 |
+5 days |
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Share of homes sold above list price |
30.8% |
Down from 36% |
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Share of homes with a price drop |
6.8% |
+1.8 pts. |
Highest level on record |
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Average sale-to-list price ratio |
99.4% |
-0.5 pts. |
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Metro-level highlights: Four weeks ending July 28, 2024 Redfin’s metro-level data includes the 50 most populous U.S. metros. Select metros may be excluded from time to time to ensure data accuracy. |
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Metros with biggest year-over-year increases |
Metros with biggest year-over-year decreases |
Notes |
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Median sale price |
Detroit (17.2%) New Brunswick, NJ (15%) Providence, RI (13.6%) Milwaukee (13%) West Palm Beach, FL (12.8%) |
Austin, TX (-2.3%) Dallas (-0.4%)
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Declined in 2 metros |
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Pending sales |
San Francisco (7.1%) Newark, NJ (6.9%) Los Angeles (4.1%) San Jose, CA (3.3%) Boston (2.7%) Providence, RI (2.6%) Cincinnati, OH (0.7%) |
Houston (-30.5%) Atlanta (-16.1%) Minneapolis (-15.2%) Fort Lauderdale, FL (-14%) West Palm Beach, FL (-13%)
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Increased in 7 metros |
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New listings |
Las Vegas (17.5%) San Jose, CA (17.3%) Jacksonville, FL (16.1%) Miami (15.4%) San Diego (15%)
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Atlanta (-16%) Houston (-12.9%) Warren, MI (-8.5%) Portland, OR (-7.6%) Chicago (-7.1%) |
Declined in 13 metros |
To view the full report, including charts, please visit: https://www.redfin.com/news/housing-market-update-pending-sales-monthly-payments-down
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, title insurance, and renovations services. We run the country's #1 real estate brokerage site. Our customers can save thousands in fees while working with a top agent. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home can have our renovations crew fix it up to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we've saved customers more than $1.6 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 4,000 people.
Redfin’s subsidiaries and affiliated brands include: Bay Equity Home Loans®, Rent.™, Apartment Guide®, Title Forward® and WalkScore®.
For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email press@redfin.com. To view Redfin's press center, click here.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240801617669/en/
Contact Redfin
Redfin Journalist Services:
Tana Kelley
press@redfin.com
Source: Redfin
Released August 1, 2024
