House Hunters Are Back As Monthly Mortgage Payments Post First Annual Decline Since 2020

August 22, 2024 by Dana Anderson

Signals of early-stage homebuying demand, including home tours, are gaining momentum as mortgage rates stabilize at a 15-month low.

The median U.S. monthly mortgage payment was $2,587 during the four weeks ending August 18, its lowest level since February and down 0.1% from a year earlier. That’s a tiny drop, but it marks the first time in four years monthly payments have posted any decline at all. Housing payments are falling because mortgage rates are falling; weekly average mortgage rates are sitting at a 15-month low of just below 6.5%, down from a peak of 7.2% in May. Home prices are still near record highs, up 3.6% year over year.

Mortgage rates have been holding steady around 6.5% since the start of August. The stabilization of rates well below their peak has inspired house hunters to hit the pavement: Some would-be buyers who had been waiting for rates to decline more have realized that’s unlikely to happen anytime soon, and others are gaining confidence that rates won’t suddenly pop up before they put an offer on a home. Redfin’s Homebuyer Demand Index–a measure of requests for tours and other buying services from Redfin agents–has risen 4% over the last week to its highest level in two months.

The uptick in home tours hasn’t yet translated to more sales. 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%. But pending sales are a lagging indicator, and they may improve as home tours pick up, and Redfin agents report they’ve seen an uptick in buyer interest.

“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.”

On the supply side, new listings are up 3.4% year over year and the total number of homes for sale is up 18%. Redfin economists say we could see listings rise in the coming weeks, with the August 17 implementation of the NAR settlement inspiring some sellers to list their home, in hopes of a lower fee.

For Redfin economists’ takes on the housing market, please visit Redfin’s “From Our Economists” page.

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	6.46% (Aug. 21)	Near lowest level since spring 2023	Down from 7.48%	Mortgage News Daily
Weekly average 30-year fixed mortgage rate	6.49% (week ending Aug. 15)	Near lowest level in over a year; down from 7.22% in early May	Down from 7.09%	Freddie Mac
Mortgage-purchase applications (seasonally adjusted)		Declined 5% from a week earlier (as of week ending Aug. 16)	Down 8%	Mortgage Bankers Association
Redfin Homebuyer Demand Index (seasonally adjusted)		Up 4% from a month earlier to highest in two months (as of week ending Aug. 18)	Down 8% (smallest decline since April)	Redfin Homebuyer Demand Index, a measure of requests for tours and other homebuying services from Redfin agents
Touring activity		Up 9% from the start of the year (as of Aug. 19)	At this time last year, it was up 5% from the start of 2023	ShowingTime, a home touring technology company
Google searches for “home for sale”		Up 8% from a month earlier (as of Aug. 19)	Down 8%	Google Trends

Key housing-market data

U.S. highlights: Four weeks ending August 18, 2024 Redfin’s national metrics include data from 400+ U.S. metro areas, and is based on homes listed and/or sold during the period. Weekly housing-market data goes back through 2015. Subject to revision.
	Four weeks ending August 18, 2024	Year-over-year change	Notes
Median sale price	$390,000	3.6%	Up about $1,000 from a week earlier, but about $6,000 below all-time high set during the 4 weeks ending July 7
Median asking price	$397,388	6%	Biggest increase since Oct. 2022
Median monthly mortgage payment	$2,587 at a 6.49% mortgage rate	-0.1%	Lowest level since Feb.; $245 below all-time high set during the 4 weeks ending April 28
Pending sales	80,894	-5.3%	Biggest decline since Nov. 2023, except the 4 weeks ending Aug. 4, when there was a 5.9% decline
New listings	90,302	3.4%
Active listings	1,000,540	18%	Smallest increase since April
Months of supply	3.6	+0.7 pts.	4 to 5 months of supply is considered balanced, with a lower number indicating seller’s market conditions.
Share of homes off market in two weeks	36.5%	Down from 42%
Median days on market	35	+6 days
Share of homes sold above list price	28.9%	Down from 34%
Share of homes with a price drop	6.9%	+1.7 pts.	Highest level on record
Average sale-to-list price ratio	99.2%	-0.5 pts.

Metro-level highlights: Four weeks ending August 18, 2024 Redfin’s metro-level data includes the 50 most populous U.S. metros. Select metros may be excluded from time to time to ensure data accuracy.
	Metros with biggest year-over-year increases	Metros with biggest year-over-year decreases	Notes
Median sale price	Philadelphia (12.6%) Nassau County, NY (10.4%) Detroit (10%) Anaheim, CA (9.9%) Milwaukee (9.5%)	Austin, TX (-1.8%) Tampa, FL (-1.3%) San Antonio, TX (-1.1%) Fort Worth, TX (-0.7%) Phoenix (-0.1%)	Declined in 5 metros
Pending sales	San Jose, CA (9.2%) Los Angeles (7.8%) Boston (7.5%) Montgomery County, PA (5.5%) Sacramento, CA (5.2%)	Houston (-17.1%) Atlanta (-16%) Tampa, FL (-15.2%) West Palm Beach, FL (-14.7%) Fort Lauderdale, FL (-13%)	Increased in 13 metros
New listings	San Jose, CA (17.4%) San Diego (16.4%) Montgomery County, PA (16.2%) Miami (13.4%) Baltimore, MD (12.6%)	Atlanta (-15.1%) Newark, NJ (-5.9%) Austin, TX (-5.2%) San Antonio (-3.8%) Tampa, FL (-3.7%)	Declined in 14 metros