The weekly average mortgage rate hit a 10-month low of 6.58 percent last week, causing the typical homebuyer’s monthly mortgage payment to decline to $2,614, Redfin reported on Thursday. That figure marks the typical monthly mortgage payment’s lowest level since January, and is also down $224 from an all-time high in May.
The decline in rates is due to a few factors — a weak July jobs report, a neutral inflation report and home sale prices moving past their peak and starting to dip as fall approaches.
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Those factors and others mean that now is a great time for buyers to get into the market, Redfin said.
Mortgage rates have already been priced according to the Fed’s expected rate cut in September, and will probably not fall much further, according to Redfin Head of Economics Research Chen Zhao, meaning that now is a good time for buyers to lock in that rate.
Additionally, home prices are overall on the rise, despite seasonal dips. The median U.S. home sale price was $394,498 during the four weeks ending Aug. 17, which was up 1.9 percent from the same period the year before. That uptick was the largest increase in four months, according to Redfin.
Inventory growth is also dipping, Redfin said, with new listings only up 0.5 percent year over year and the total number of homes for sale up 10.7 percent year over year — the smallest gain in 18 months. Because of cooling demand from buyers, some potential sellers are refraining from listing because they don’t want a sales price that doesn’t match their expectations.
Buyers also have leverage right now since homes have been sitting on the market for much longer than is usual for this time of year. The typical home spends 42 days on market before going under contract, which is a week longer than in 2024 and the longest span for this time of year since 2019. Sellers of homes that have been sitting are also more likely to negotiate and make concessions in order to get the sale, according to Redfin agents.
“I’m telling serious buyers that they have leverage right now — and in the Bay Area, that has been unheard of for a long time,” Josh Felder, a Redfin Premier agent in San Francisco, said in Redfin’s report. “There’s less competition than usual because of economic uncertainty, and the market is no longer tilted in sellers’ favor. I just submitted an offer for a client on a townhouse in Mountain View, which is in Google land and would have gotten between five and 10 offers a year ago. We offered close to the asking price with no competition and got it. Prices are still high, but first-time buyers have a window.”
