For the first time since 2020, the median U.S. monthly mortgage payment declined during the four weeks ended August 18. The payment of $2,587 is at its lowest level since February and down 0.1% from a year ago, according to Redfin.
The downward trend is likely due to falling mortgage rates, which are sitting at a 15-month low of just below 6.5%, down from a peak of 7.2% in May. Although home prices remain near record highs, up 3.6% year over year, house hunters are showing renewed interest in the market as rates stabilize.
Touring activity is up 9% from the start of the year as of Aug. 19 and Google searches for ‘home for sale’ are up 8% from a month earlier, said Redfin. An uptick in home tours hasn’t yet translated to more sales, however. Pending home sales are down 5.3% year over year, the biggest decline in nine months with the exception of the 4 weeks ending August 4, and mortgage-purchase applications are down 8%. The firm noted pending sales are a lagging indicator, and they may improve as home tours pick up.
“Over the last two weeks, I’ve seen momentum build and I’ve felt clients get more excited about the prospect of buying or selling a home,” said Gregory Eubanks, a Redfin Premier agent in Los Angeles. “That stems from encouraging economic news and speculation that the Fed is going to cut interest rates in September. Some people are actively searching and listing their homes right now, and others are still hoping rates drop more significantly before making a move.”
New listings are up 3.4% year over year and the total number of homes for sale is up 18%. Redfin economists speculate listings could rise in the coming weeks, with the Aug. 17 implementation of the National Association of Realtors settlement inspiring some sellers to list their home in hopes of a lower fee.
The metro areas with the biggest year-over-year increases in sale prices are Philadelphia (12.6%), Nassau County, New York (10.4%), Detroit (10%), Anaheim (9.9%) and Milwauikee (9.5%). Markets with the largest year-over-year decreases in sale prices are Austin (-1.8%), Tampa (-1.3%), San Antonio (-1.1%), Fort Worth (-0,7%) and Phoenix (-0.1%), according to Redfin.
Thirteen markets recorded increases in pending sales, led by San Jose; Los Angeles; Boston; Montgomery County, Pennsylvania; and Sacramento. Pending sales decreased in Houston, Atlanta, Tampa, West Palm Beach and Fort Lauderdale.
New listings fell in 14 markets, most notably in Atlanta, Newark, Austin, San Antonio and Tampa. Meanwhile, listings increased in San Jose; San Diego; Montgomery County, Pennsylvania; Miami and Baltimore.
