The weekly average mortgage rate has ticked down to its lowest level in over 10 months. But home-sale prices are still rising, and pending home sales are up just 1.6% from a year ago.

Declining mortgage rates have pushed the median U.S. monthly housing payment down to $2,593, the lowest level since January, according to a new report from Redfin, the real estate brokerage powered by Rocket. The weekly average mortgage rate has ticked down to 6.56%, the lowest level in nearly a year.

Lower monthly payments are leading to a modest uptick in home sales. Pending home sales rose 1.6% from a year earlier, in line with the increases Redfin has seen over the last several weeks.

But sales aren’t surging, likely because it’s still difficult for many Americans to afford a home. Home-sale prices rose 1.6% year over year during the four weeks ending August 31, and while monthly payments have fallen from their peak, they’re still up 5% from a year ago.

“Mortgage rates haven’t come down significantly enough to bring back a flood of buyers. House hunters are on rate watch, hoping they’ll drop below 6%,” said Mariah O’Keefe, a Redfin Premier agent in Seattle. “Well-priced single-family homes in desirable neighborhoods are finding buyers fast, but condos, townhouses, and homes that are not prepped well are taking a long time to sell. The good news for buyers: sellers have come around to less demand; they’re motivated to sell and typically price homes fairly, or are willing to negotiate.”

Buyers should keep in mind that while there are more sellers than buyers in the market, some would-be home sellers are now opting to stay put because they don’t think they’ll get the price they want. New listings are up just 1.1% year over year, and the total number of homes for sale is up 11.3%—the smallest increase in 18 months. The fact that inventory has declined from its summer peak is one reason sale prices are still rising.

Redfin economists caution buyers against waiting for mortgage rates to drop more. Today’s mortgage rates have already priced in the Fed’s anticipated interest-rate cut come their September meeting, and rates could increase if Friday’s jobs report is stronger than expected.

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

Leading indicators

Key housing-market data

To view the full report, including charts, please visit: https://www.redfin.com/news/housing-market-update-cheaper-mortgage-payments-trickle-of-demand.

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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