Mortgage rates fell to their lowest since February following the lower-than-expected inflation report, a move that will provide some relief to homebuyers.
Home loan rates fall: See what an EMI of Rs 3,000 can get you now
According to a report from Redfin, a homebuyer with a $3,000 monthly budget can now purchase a $450,000 home with a mortgage rate of 6.8%, increasing their purchasing power by about $25,000 since April, when rates peaked at 7.5%. Nevertheless, the typical U.S. homebuyer's monthly mortgage payment is now $2,722, $115 lower than April's all-time high, even as home prices are just $100 below last week's record.
Increased supply and its impact on home buyers
There's more supply on the market, with new listings up 6.4% from a year ago. Total listings are at a nearly four-year high. Many homeowners are selling because they're tired of waiting for interest rates to come down substantially. It's been more than two years since interest rates started to rise from pandemic-era lows.
Despite good conditions, buyers hesitate
Despite falling interest rates and rising inventory, pending sales fell 5.6% year over year, marking the biggest decline in eight months. The Redfin Homebuyer Demand Index shows requests for tours and other purchasing services are down 15%. Mortgage purchase applications are also down 3% week over week on a seasonally adjusted basis.
Some buyers are waiting for mortgage rates to fall further, believing the Federal Reserve will cut rates by the end of the year. But Chen Chao, economic research lead at Redfin, suggests waiting may be futile, as the market is already anticipating rate cuts in September, with further cuts expected in 2024 and 2025. Chao advises that now may be the time for potential homebuyers to make a serious offer.
Heatwave impacts home tours
Extreme heat has also dampened demand, keeping potential buyers indoors in some areas, such as Nashville, Tennessee. Kristin Sanchez, an agent with Redfin Premier, said the severe weather has led to fewer attendees at open houses.
Leading Indicators
Homebuying demand and activity value indicators (if applicable) Recent change, year-over-year change, Source: Daily average 30-year fixed mortgage rate 6.83% (July 17th) The lowest level since February. Down from 7.14% two weeks ago Down from 6.9% Mortgage News Daily Weekly average 30-year fixed mortgage rate 6.89% (week ending July 11) Down from 6.95% last week Down from 6.96% Freddie Mac Mortgage Purchase Applications (seasonally adjusted) Down 3% week-over-week (week ending July 12) – Down 14% Mortgage Bankers Association Redfin Home Buyer Demand Index (seasonally adjusted) Up 3% month-over-month (week ending July 14) – Down 15% Redfin Home Buyer Demand Index Viewing Activity Up 26 since the beginning of the year (as of July 14) – Up 19% since the beginning of 2023 ShowingTime Google searches for “homes for sale” Up 4% month-over-month (as of July 15) – Down 20% Google Trends
Key Housing Market Data
Redfin's national index covers data for over 400 metro areas in the U.S. based on homes listed and/or sold during this period. Weekly housing market data dates back to 2015 and is subject to revision.
Median sales price: $396,379 (up 4.4% from last year) Median asking price: $404,998 (up 5.2%) Median monthly mortgage payment: $2,722 with a 6.89% mortgage rate (up 6.1%, $115 below all-time high) Pending sales: 81,297 (down 5.6%, biggest decrease in eight months) New listings: 93,676 (up 6.4%) Active listings: 977,230 (up 18.4%, smallest increase in three months) Months of supply: 3.6 months (up 0.7 points) Percentage of homes off the market in two weeks: 39.1% (down from 44%) Median days on market: 32 days (up 4 days) Percentage of homes selling for above asking price: 31.6%(down from 36%)Percentage decline: 6.7% (up 1.8 points, highest ever)Average sales price to list price ratio: 99.5% (down 0.5 points)Metro-level highlights: 4 weeks ending 7/14/2024
Redfin's city-level data includes the 50 most populous cities in the United States.
Cities with the biggest increase in median sales price year-over-year: Detroit: 16.3% Fort Lauderdale, FL: 14.4% West Palm Beach, FL: 13.9% Providence, RI: 13.4% New Brunswick, NJ: 12.3% Cities with the biggest decrease in median sales price year-over-year: Dallas: -2.3% Austin, TX: -2.1% Cities with the biggest increase in pending sales year-over-year: San Jose, CA: 9.6% San Francisco: 7.1% Boston: 4.5% Newark, NJ: 3.5% Cincinnati, OH: 2.4% Cities with the biggest decrease in pending sales year-over-year: Houston: -24.4% West Palm Beach, FL: -16.9% Minneapolis: -16.2% Virginia Beach, VA: -13.4% Atlanta: -12.9% Cities with the biggest increase in new listings year-over-year: San Jose, CA: 30.3% Las Vegas: 19.7% Miami: 18.9% Jacksonville, FL: 17.4% Seattle: 15.6% Cities with the biggest decrease in new listings year-over-year: Atlanta: -13.1% Houston: -6.6% Warren, MI: -5.1% Detroit: -4.5% Minneapolis: -3.2%
See also: