SEATTLE, WA — Mortgage rates have dropped to their lowest levels since April 2023, hitting a daily average of 6.34% on August 5, according to a new report from Redfin. The decline in rates followed a weaker-than-expected jobs report, which stoked fears of a recession. Although rates have edged up slightly since then, they remain near their lowest point in over a year.
Home prices are also seeing a decline from their peak. The median sale price was $389,750 for the four weeks ending August 4, a drop of more than $6,000 from early July’s all-time high. This decline is typical for the season, but the year-over-year increase of 3.2% marks the smallest growth in nine months, indicating a slight easing in price growth.
Despite the easing affordability crunch, home sales have yet to show significant improvement. Pending sales are down 6.7% year over year, marking the largest decline in nine months. There was no noticeable increase in offers written with Redfin agents over the past weekend, even after rates fell on Friday. However, there are signs that potential buyers are starting to come off the sidelines. Mortgage-purchase applications have risen slightly on a seasonally adjusted basis over the last week. Redfin’s Homebuyer Demand Index, which measures requests for tours and other buying services, is down 13% year over year. However, this is the smallest decline in three months, and Redfin agents report increased interest in touring homes.
“Many of the buyers I’m working with are excited because they’ve been casually house hunting for a year, waiting for rates to come down before they make an offer. Now a lot of those buyers want to get in now, before rates get too low and cause more competition,” said Redfin Premier agent Shoshana Godwin. “One of my listings, which went on the market last week, had over 100 parties come through and received nine offers. Buyers are securing lower rates than they were a few months ago, but costs are still high enough that buyers are picky. If they’re going to have a high monthly payment, they want a move-in ready home so they don’t have to pay for upgrades.”
On the supply side, new listings are gaining some momentum. New listings of homes for sale are up 5.9% year over year, the largest increase in five weeks. Redfin economists suggest that now may be a good time to enter the market, given the combination of declining rates and an abundance of available inventory.
As the market navigates these shifts, potential buyers and sellers alike are watching closely to determine the best time to make a move. With mortgage rates near their lowest levels in over a year and home prices showing signs of stabilization, the upcoming weeks could be crucial for market participants.
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