Pending home sales are up 1% from a year ago, and new listings are stagnant. Redfin agents say some house hunters are staying on the sidelines because they want mortgage rates to drop more significantly before jumping in.

Declining mortgage rates are one factor pushing the median U.S. monthly mortgage payment down to $2,604, more than $200 below May’s all-time high. That’s according to a new report from Redfin, the real estate brokerage powered by Rocket.

The daily average mortgage rate declined to an 11-month low of 6.28% this week, upping homebuyers’ purchasing power by more than $20,000 since mid-summer.

But home-sale prices are still rising: The median sale price was roughly $393,000 during the four weeks ending September 7. That’s up 1.7% year over year, the second-biggest increase since April.

Sale prices are rising partly because new listings are losing steam. New listings are up 1.3% year over year, compared to double-digit increases in early spring. Some prospective sellers are staying put due to lackluster homebuying demand, and some because they don’t want to buy another home while costs are high.

Despite falling mortgage rates, many house hunters are staying on the sidelines. Pending home sales are up just 1.1% year over year, the smallest increase in two months, and Redfin’s Homebuyer Demand Index—a measure of tours and other buying services from Redfin agents—is declining.

Redfin agents say there are some buyers out there. But a lot of buyers are being picky with how they spend their money and are often trying to negotiate with sellers.

“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 Nashville, TN Redfin Premier agent Kristin Sanchez. “A lot of house hunters are waiting because they think mortgage rates will drop more when the Fed cuts interest rates in September. I’m trying to advise buyers that’s unlikely to happen, and that now is a good time to lock in a rate.”

The daily average mortgage rate fell from 6.85% a month ago to 6.28% at the start of this week, partly because of two weaker-than-expected jobs reports, and partly because Fed Chair Jerome Powell indicated in his Jackson Hole speech that the Fed will cut rates at its September 17 meeting. Markets have already priced in the upcoming rate cuts; rates are unlikely to fall immediately following next week’s Fed meeting.

For Redfin economists’ takes on the housing market, please visit Redfin’s “From Our Economists” page.

To view the full report, including charts, please visit:

https://www.redfin.com/news/housing-market-update-lower-mortgage-rates-cautious-homebuyers

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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