See What $3,000 EMI Can Get You Today
Mortgage rates have dropped to their lowest level since February following a cooler-than-expected inflation report. This development brings some relief to homebuyers.
Mortgage Rates Drop: See What $3,000 EMI Can Get You Today
According to Redfin’s report, homebuyers with a $3,000 monthly budget can now afford a $450,000 home at a 6.8% mortgage rate, gaining about $25,000 in purchasing power since April when rates peaked at 7.5%. Despite this, the typical U.S. homebuyer’s monthly housing payment is now $2,722, which is $115 lower than April’s record high, even as home prices are just about $100 shy of last week’s record.
Increasing Supply and Its Impact on Homebuyers
There is more supply in the market, with new listings up by 6.4% year-over-year. The total number of listings is at its highest level in nearly four years. Many homeowners are selling because they’re tired of waiting for rates to drop significantly. It has been over two years since rates began rising from pandemic-era lows.
Buyers’ Hesitance Despite Favorable Conditions
Despite falling rates and increasing inventory, pending sales are down by 5.6% year-over-year, marking the biggest decline in eight months. The Redfin Homebuyer Demand Index shows a 15% decrease in requests for tours and other buying services. Mortgage-purchase applications are also down 3% week-over-week on a seasonally adjusted basis.
Some buyers are waiting for mortgage rates to decline further, believing the Federal Reserve will cut interest rates by the end of the year. However, Redfin’s economic research lead Chen Zhao suggests that waiting may be in vain as markets already expect rate cuts in September and more into 2024 and 2025. Zhao advises that now may be the time for house hunters to get serious about making offers.
Heat Waves Impacting House Tours
Extreme heat is also a factor in the slow demand. In some regions, like Nashville, TN, heat waves are keeping potential buyers indoors. Kristin Sanchez, a Redfin Premier agent, notes that open houses are seeing less traffic due to the extreme weather conditions.
Leading Indicators
| Indicators of Homebuying Demand and Activity | Value (if applicable) | Recent Change | Year-over-year Change | Source |
|---|---|---|---|---|
| Daily average 30-year fixed mortgage rate | 6.83% (July 17) | Lowest level since February; down from 7.14% 2 weeks earlier | Down from 6.9% | Mortgage News Daily |
| Weekly average 30-year fixed mortgage rate | 6.89% (week ending July 11) | Down from 6.95% a week earlier | Down from 6.96% | Freddie Mac |
| Mortgage-purchase applications (seasonally adjusted) | Decreased 3% from a week earlier (as of week ending July 12) | – | Down 14% | Mortgage Bankers Association |
| Redfin Homebuyer Demand Index (seasonally adjusted) | Up 3% from a month earlier (as of week ending July 14) | – | Down 15% | Redfin Homebuyer Demand Index |
| Touring activity | Up 26 from the start of the year (as of July 14) | – | Up 19% from the start of 2023 | ShowingTime |
| Google searches for “home for sale” | Up 4% from a month earlier (as of July 15) | – | Down 20% | Google Trends |
Key Housing-Market Data
Redfin’s national metrics cover data from over 400 U.S. metro areas based on homes listed and/or sold during this period. Weekly housing-market data dates back to 2015 and is subject to revision.
- Median sale price: $396,379 (up 4.4% year-over-year)
- Median asking price: $404,998 (up 5.2%)
- Median monthly mortgage payment: $2,722 at a 6.89% mortgage rate (up 6.1%, $115 below all-time high)
- Pending sales: 81,297 (down 5.6%, biggest decline in 8 months)
- New listings: 93,676 (up 6.4%)
- Active listings: 977,230 (up 18.4%, smallest increase in 3 months)
- Months of supply: 3.6 (up 0.7 pts)
- Share of homes off market in two weeks: 39.1% (down from 44%)
- Median days on market: 32 (up 4 days)
- Share of homes sold above list price: 31.6% (down from 36%)
- Share of homes with a price drop: 6.7% (up 1.8 pts, highest level on record)
- Average sale-to-list price ratio: 99.5% (down 0.5 pts)
Metro-Level Highlights: Four Weeks Ending July 14, 2024
Redfin’s metro-level data includes the 50 most populous U.S. metros.
Metros with Biggest Year-Over-Year Increases in Median Sale Price
- Detroit: 16.3%
- Fort Lauderdale, FL: 14.4%
- West Palm Beach, FL: 13.9%
- Providence, RI: 13.4%
- New Brunswick, NJ: 12.3%
Metros with Biggest Year-Over-Year Decreases in Median Sale Price
- Dallas: -2.3%
- Austin, TX: -2.1%
Metros with Biggest Year-Over-Year Increases in Pending Sales
- San Jose, CA: 9.6%
- San Francisco: 7.1%
- Boston: 4.5%
- Newark, NJ: 3.5%
- Cincinnati, OH: 2.4%
Metros with Biggest Year-Over-Year Decreases in Pending Sales
- Houston: -24.4%
- West Palm Beach, FL: -16.9%
- Minneapolis: -16.2%
- Virginia Beach, VA: -13.4%
- Atlanta: -12.9%
Metros with Biggest Year-Over-Year Increases in New Listings
- San Jose, CA: 30.3%
- Las Vegas: 19.7%
- Miami: 18.9%
- Jacksonville, FL: 17.4%
- Seattle: 15.6%
Metros with Biggest Year-Over-Year Decreases in New Listings
- Atlanta: -13.1%
- Houston: -6.6%
- Warren, MI: -5.1%
- Detroit: -4.5%
- Minneapolis: -3.2%
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