Are prices set for a rebound?
The median US home-sale price increased 2.2% year over year to $392,225 during the four weeks ending September 14, the biggest increase in five months, according to a new report by real estate giant Redfin. The uptick comes as mortgage rates dropped to their lowest point in nearly a year, yet many buyers are still sitting on the sidelines, weighing whether to act now or wait for further rate declines.
Redfin’s data, which covers over 400 metro areas, showed that the median asking price also rose 2.9% to $402,475, the largest jump in four months. Despite these gains, pending home sales edged up just 0.8% from a year earlier, reflecting persistent caution among buyers. New listings increased by a modest 1.1%, while the total number of active listings rose 9.9%, the smallest increase since March 2024.
“Many homes are sitting on the market longer than usual, and many sellers are open to concessions,” said Tamara Mattox-Kabat, a Redfin senior premier agent in Denver. “A lot of buyers are waiting for interest rates to drop further before making offers. The problem with that strategy is that if rates do fall again, more buyers will come off the sidelines, prices will rise, and sellers will regain their leverage. That means even with lower mortgage rates, buyers could end up with a higher monthly payment.”
Mortgage rates fell to 6.35% for the week ending September 11, down from roughly 6.9% at the start of summer, driven by weaker-than-expected jobs reports and the Federal Reserve’s first interest-rate cut of the year. The median monthly mortgage payment ticked up to $2,590, still near the lowest level of 2025, due to rising home prices.
Buyers face a dilemma
Many prospective buyers are now faced with a classic conundrum: buy now with less competition, or wait and risk higher prices if rates fall further. “It is definitely a buyer’s market here,” Mattox-Kabat said. “If they’re not priced and presented well from the outset, many homes are sitting on the market longer than usual.”
Redfin economists expect mortgage rates to remain steady as markets await further economic data, particularly the next jobs report in early October. The Fed has signaled two more potential rate cuts before year-end, but the impact on housing affordability remains uncertain.
United Wholesale Mortgage (UWM) executive vice president and chief strategy officer Alex Elezaj told Mortgage Professional America that the mortgage market could be in for a busy end to the year as buyer confidence gradually returns.
"We’re very optimistic about the fourth quarter. Just in the past few weeks as mortgage rates have come down and we did our own incentive… we’ve seen very big volume. We’re excited about it, we’re prepared for it," he said. “It seems like from our perspective, a lot of the economic indicators are currently working in our favor and we think it could be a really big Q4 for us.”
Regional disparities emerge
Metro-level data revealed that Detroit, Pittsburgh, and Cleveland posted the largest year-over-year price gains, while San Francisco, Sacramento, and Portland saw declines. New listings surged in Pittsburgh and Baltimore but fell sharply in Orlando and Fort Lauderdale.
The housing market’s current state reflects a delicate balance between affordability, inventory, and buyer sentiment. While mortgage-purchase applications rose 3% week over week and Google searches for “homes for sale” jumped nearly 30% year over year, Redfin’s Homebuyer Demand Index was down 13% from a month earlier, highlighting ongoing hesitancy.
With rates at an 11-month low and home prices climbing, buyers must decide whether to act now or risk being priced out if competition intensifies. One piece of advice Kirk Todd, branch manager and senior loan originator at Choice Mortgage Group has been telling his clients is that if they want to make a move on a home, now is the time.
“I've been encouraging clients that if you can afford a house today at these interest rates, now's the time to act on it,” he said. “In most markets, when you start to see rate declines, you're going to see more competition in the market. You're going to see more buyers because it's just going to let more buyers in.”
