Lower rates eased payments, but demand remained subdued
The average US mortgage rate dropped to its lowest point in over 10 months, bringing some relief to buyers but failing to ignite a surge in homebuying demand, according to Redfin’s latest report. The median monthly housing payment fell to $2,593 in late August, the lowest since January, as the weekly average 30-year fixed mortgage rate slipped to 6.56%.
Sellers adjust to tempered demand
Despite the lower payments, the market saw only a slight uptick in activity. Pending home sales rose 1.6% year over year, and new listings edged up just 1.1%.
“Mortgage rates haven’t come down significantly enough to bring back a flood of buyers. House hunters are on rate watch, hoping they’ll drop below 6%,” said Mariah O’Keefe, a Redfin Premier agent in Seattle.
“Well-priced single-family homes in desirable neighborhoods are finding buyers fast, but condos, townhouses, and homes that are not prepped well are taking a long time to sell. The good news for buyers: sellers have come around to less demand; they’re motivated to sell and typically price homes fairly, or are willing to negotiate.”
Inventory growth slows as prices climb
Home prices continued to climb, with the median sale price up 1.6% year over year to $392,738. While monthly payments have eased from their peak, they remained 5% higher than a year ago. Inventory growth also slowed, with active listings up 11.3%—the smallest increase in 18 months.
“Some would-be home sellers are now opting to stay put because they don’t think they’ll get the price they want,” Redfin’s report noted.
Redfin economists cautioned buyers against waiting for further rate drops, noting that current mortgage rates already reflect expectations of a Federal Reserve rate cut.
“Rates could increase if Friday’s jobs report is stronger than expected,” the report stated.
Broader industry data echoed Redfin’s findings. The Mortgage Bankers Association reported mortgage-purchase applications up 17% year over year, but down 3% from the previous week. Google searches for “homes for sale” rose 17% over the year, while touring activity increased 27% from the start of 2025, according to ShowingTime.
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