SEATTLE, WA — In a surprising shift, the median U.S. monthly mortgage payment has dropped to $2,587 for the four weeks ending August 18, marking its lowest point since February. This represents a slight 0.1% decrease from last year, the first decline in four years, according to a recent Redfin report.
The decrease in payments aligns with a drop in mortgage rates, which now average below 6.5%, their lowest in 15 months. Rates peaked at 7.2% in May. Although home prices remain high, with a 3.6% increase from the previous year, the steadiness in mortgage rates has revitalized interest from potential buyers. Redfin’s Homebuyer Demand Index, which tracks requests for tours and buying services, has risen 4% over the last week, reaching a two-month high.
However, this heightened interest hasn’t yet boosted sales. Pending home sales have fallen by 5.3% year-over-year, the largest drop in nine months, barring the early August period. Mortgage-purchase applications are also down by 8%. Despite this, the increase in home tours could signal future sales growth, as Redfin agents report growing buyer enthusiasm.
“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,” observed Gregory Eubanks, a Redfin Premier agent in Los Angeles. He noted that positive economic news and speculative interest rate cuts from the Federal Reserve are motivating buyers and sellers alike.
On the supply front, new listings have increased by 3.4% compared to last year, and total homes for sale have risen by 18%. Redfin economists anticipate more listings following the August 17 NAR settlement, which may encourage sellers hoping for reduced fees.
As the housing market navigates these shifts, cautious optimism prevails among both buyers and sellers, driven by stable mortgage rates and strategic market movements.
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