Median monthly mortgage payments fell to a seven-month low during the second week of August after 12 consecutive weeks of flat or declining payments, according to Redfin. The median monthly payment is now $2,631, down $215 from its May peak of $2,846.
The report said lower mortgage rates are sending monthly payments lower. Mortgage rates fell to 6.53% last week, the lowest mark in 10 months. That means a buyer on a $3,000 monthly budget has gained roughly $20,000 in purchasing power since mortgage rates peaked at 7.08% in May. Waiting for further rate cuts to start a home search may be risky for potential homebuyers, according to Redfin.
“The mortgage rates that buyers can lock in today have already priced in the likelihood that the Fed will cut rates on September 17,” said Redfin head of economics research Chen Zhao. “That means that mortgage rates are unlikely to drop any further when the Fed actually makes the expected cut. And the window to snag a mortgage rate in the mid-6s may be limited.”
Increased rate volatility is expected in the coming weeks as new economic data is released, she added.
While rates may be favorable for homebuyers, median home prices continue to grow, reaching $396,000 during the four weeks ending August 10, which is up 2.1% year-over-year. That is the fastest rate since early April and marked the fifth consecutive week of price growth after dropping to a two-year low in early July, according to Redfin.
The real estate brokerage noted costs rose faster even as demand remained slower, with pending sales down 0.5% from the previous year. Homes were also spending an extra week on the market compared with last year. Total inventory of for-sale homes grew 11.5% year-over-year during the four weeks ending August 10, the slowest pace since March 2024.
Mortgage-purchase applications were up 17% year-over-year, while demand was down 4% based on Redfin tour and homebuying services data. There were 84,177 pending sales for the four weeks ending August 10, down 0.5% year-over-year. New listings increased 1% to 92,854.
Metros with the biggest increases in median sale price include Cleveland, Detroit, Pittsburgh, Montgomery County, Pennsylvania and Nassau County, New York. Rents decreased the most in Oakland, San Francisco, Dallas, Fort Worth and Houston.
The markets with the most new listings included Montgomery County, Cleveland, Washington, D.C., Pittsburgh and Milwaukee. Markets with the biggest decrease in listings include Portland, Tampa, Orlando, West Palm Beach and Sacramento.
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