Redfin economists say the recent dip in mortgage rates gives serious house hunters a window of opportunity to lock in a lower monthly housing payment

The daily average mortgage rate dropped to 6.57% on August 4, the lowest level in 10 months, according to a new report from Redfin, the real estate brokerage powered by Rocket. That means a homebuyer on a $3,000 monthly budget has gained roughly $20,000 in purchasing power since May, when the daily average rate hit a recent peak of 7.08%.

A buyer on that budget can afford a $458,750 home with today’s mortgage rate, compared to the $439,000 home they could have bought with May’s peak.

To look at affordability another way, the monthly mortgage payment on the median-priced U.S. home, which goes for roughly $447,000, is $2,862 with today’s average rate. In mid-May, when rates were sitting above 7%, the monthly payment would have been $2,983, over $100 more.

Mortgage rates fell over the weekend following a weaker-than-expected July jobs report. The U.S. added fewer jobs than anticipated, and the unemployment rate ticked up, which pushed up the chances of the Fed cutting interest rates in September.

“This dip in mortgage rates gives house hunters a window of opportunity to buy before summer ends,” said Daryl Fairweather, Redfin’s chief economist. “While housing costs are still fairly high, the recent decline in rates boosts purchasing power and improves overall homebuying conditions. Combined with the surplus of homes for sale on the market, serious buyers may want to jump in sooner rather than later.”

House hunters should take note that there are hundreds of thousands more home sellers than buyers in the market, giving many prospective buyers an opportunity to negotiate home prices down and ask for concessions. But the gap between sellers and buyers is starting to shrink as new listings decline, with would-be sellers opting to stay put instead of listing their home in a buyer’s market.

To view the full report, including a chart, please visit:

https://www.redfin.com/news/mortgage-rates-fall-purchasing-power-increases

About Redfin

Redfin is a technology-driven real estate company with the country's most-visited real estate brokerage website. As part of Rocket Companies (NYSE: RKT), Redfin is creating an integrated homeownership platform from search to close to make the dream of homeownership more affordable and accessible for everyone. Redfin’s clients can see homes first with on-demand tours, easily apply for a home loan with Rocket Mortgage, and save thousands in fees while working with a top local agent.

You can find more information about Redfin and get the latest housing market data and research at Redfin.com/news. For more information about Rocket Companies, visit RocketCompanies.com.

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