Listings fell as buyer anxiety and high rates kept sellers on the sidelines
Redfin's latest inventory stats show the US housing market saw its biggest monthly drop in active listings since 2023 with August data showing a 1.4% decline in homes for sale. The pullback comes as homebuyer demand remains tepid, despite mortgage rates falling to their lowest levels in nearly a year.
The new report revealed that new listings also cooled, slipping 1.1% month over month to the lowest level since January.
“High housing costs and economic jitters have rattled buyers, and that unease has spilled over to sellers,” said Chen Zhao, Redfin’s head of economics research.
“We currently expect existing-home sales to end the year at around 4.05 million, or roughly flat compared to 2024, which was the worst year for sales since 1995. The good news is mortgage rates have been falling, giving homebuyers more purchasing power. We have yet to see that translate into a significant bump in sales, but that may change if rates continue declining; if we get a stronger-than-expected fall housing market, existing-home sales could end this year a little higher than last year,” Zhao said.
Mortgage rates fall, but buyers wait
The average 30-year fixed mortgage rate dipped to 6.59% in August, the lowest monthly average in 10 months, and has since dropped to 6.26%. That has triggered a rise in refinancing activity, but many would-be buyers are holding out for even lower rates.
“I think the magic number is 6%,” said Beth Behling, a Redfin Premier agent in Chicago.
“Prospective homebuyers are paying attention to mortgage rates, and if they drop to 6%, I think we’ll see a flood of interest.”
Fannie Mae’s Economic and Strategic Research Group predicted that 30-year mortgage rates would fall to 6.4% by the end of 2025 and drop further to 5.9% by late 2026.
Michele Lawrie, a veteran in real estate, said 6% is an important benchmark for mortgage rates and is often emphasized by agents and industry leaders.
The National Association of Realtors estimated that lowering rates to 6% could make homeownership possible for 5.5 million more US households. HomeAbroad calculated that buyers would save around $57 a month, or $685 a year, if rates dropped to that point.
The Federal Reserve’s recent rate cut was already priced into mortgage rates, and Redfin economists expect rates to remain steady in the near term as markets await key economic data. The next jobs report, due October 3, could influence the direction of rates and sales activity.
Home prices climb as inventory shrinks
Despite sluggish demand, the median home sale price rose 1.7% year over year in August to $440,004—the biggest increase in five months and the highest August level on record.
The price uptick is partly due to shrinking inventory: new listings fell in 44 of the 50 largest US metros last month. Still, sellers outnumbered buyers by 35.2%, the second-largest margin on record. The market posted 3.3 months of supply, the highest August level in a decade.
“It definitely feels like a buyer’s market,” said Nikkolene Byron, a Redfin Premier agent in Palm Springs.
“Most homes for sale today only get one offer. I see multiple offers occasionally, but not multiple super strong offers like we saw during the pandemic homebuying frenzy—now they’ll come in lower than the seller wants or the buyer will ask for concessions like money toward closing costs.”
Regional shifts and broader market context
Metro-level data showed the sharpest price gains in Detroit (10%), Cleveland (8.7%), and New Brunswick, NJ (7.8%), while Dallas, West Palm Beach, and Phoenix posted the largest declines.
Pending sales rose most in Pittsburgh, Cleveland, and Phoenix, but fell sharply in Detroit, Miami, and Seattle.
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