The median U.S. housing payment fell to $2,534 during the four weeks ended September 15, down 2.7% from a year earlier, according to Redfin.
The decrease in the median monthly payment was due mainly to falling mortgage rates, which dropped to their lowest level in 20 months in the lead-up to the Fed’s first interest-rate cut since 2020, the firm says.
Mortgage applications are rising, but pending home sales have yet to improve. Mortgage-purchase applications are up 5% week over week, with some buyers jumping off the sidelines as mortgage rates fall.
But many would-be buyers are still holding off, with pending home sales down 6.9% year over year, one of the biggest declines since October 2023, the firm says.
That’s despite both lower housing payments and more homes to choose from: New listings are up 5.1% year over year, and the total number of homes for sale is up 16.1%.
Rising home prices are the main factor keeping many would-be buyers on the sidelines. In addition, many buyers are waiting for mortgage rates to decrease further. Others are waiting until after the election.
“Buyers are holding their breath, watching interest rates,” says Kristin Sanchez, a Redfin Premier agent in Nashville, Tenn., in a release. “There’s pent-up energy, with people waiting for the right moment to buy a home – and it’s feeling like the dam is going to break soon.
“Once things are more settled and people know where mortgage rates are going to land and who is going to be president, the market is going to get busier. I think winter will be busier than summer, which is the opposite of a usual year.”
Photo: Pepi Stojanovski