The daily average 30-year fixed mortgage rate fell to 6.28% this week, increasing buyers’ purchasing power by more than $20,000 since mid-summer
US mortgage rates hit their lowest point this week in almost a year, giving buyers some relief. However, even with monthly payments down $200 since May, buyer activity has only edged up slightly, as many are holding out for even lower rates before entering the market.
According to real estate giant Redfin, the daily average 30-year fixed mortgage rate fell to 6.28% this week, increasing buyers’ purchasing power by more than $20,000 since mid-summer.
“There’s not a flood of buyers now that mortgage rates are coming down, but I am seeing a trickle as some house hunters do the math and realize rates have dropped enough to fit a monthly payment into their budget,” said Kristin Sanchez, a Redfin Premier agent in Nashville, TN. She added that many buyers are still waiting for rates to fall further, though she advises that now may be a good time to lock in a rate.
This cautious optimism is reflected in Fannie Mae’s latest Home Purchase Sentiment Index, which found that, for the first time this year, more Americans expect mortgage rates to drop than to rise. Yet, Kirk Todd, branch manager and senior loan originator at Choice Mortgage Group, has been advising clients that now is a good time to buy. He said if rates or prices drop further, more buyers will jump in, making competition tougher and likely pushing prices back up.
“Theoretically, property values will continue to go up,” Todd told Mortgage Professional America. “If you can get in now and afford it now, then you're set up for refinance to a lower rate. Hopefully, in that period of time, it will have built up a bunch of equity. Even if appreciation goes back to 2.5% to 3.5%, which is a normal market, that's a lot of money when you compound it.”
Pending home sales rose just 1.1% year over year for the four weeks ending September 7, the smallest increase in two months. New listings were up only 1.3% compared to last year, from the double-digit gains seen earlier in the spring. The median sale price climbed to nearly $393,000, up 1.7% from a year ago, while the median asking price reached $399,634, a 3.1% increase.
Homebuyer hesitation persists
Redfin’s Homebuyer Demand Index, which tracks tours and other buying services, declined 2% from a month earlier and is down 10% year over year.
“Some buyers are being picky with how they spend their money and are often trying to negotiate with sellers,” Sanchez said. Many sellers, meanwhile, are staying put, either deterred by lackluster demand or unwilling to buy another home while costs remain high.
The Mortgage Bankers Association noted that mortgage-purchase applications were up 7% from a week earlier and 23% year over year, suggesting some pent-up demand. However, Google searches for “homes for sale” remained flat from the previous month, and active listings increased just 10.8%, the smallest gain since March 2024.
Regional price changes and market balance
Metro-level data showed the biggest price gains in Pittsburgh (11.1%), Detroit (9.8%), and New Brunswick, NJ (7.1%), while Las Vegas (-1.1%) and San Francisco (-1%) saw slight declines. The market’s months of supply rose to 4.4, approaching a balanced state, but the share of homes selling above list price fell to 24.6%, down from 28% a year ago.
Industry experts pointed to the Federal Reserve’s upcoming meeting as a potential inflection point, but cautioned that markets have already priced in expected rate cuts. Investment banking giant Morgan Stanley expects four straight 25-basis-point rate cuts, starting at next week’s Fed meeting and continuing through January.
