Monthly payments are falling primarily because mortgage rates have dipped to a 10-month low. But home sales are still lackluster, declining slightly from a year ago.

The typical homebuyer’s monthly mortgage payment is $2,614, the lowest level since January and down $224 from May’s all-time high, according to a new report from Redfin, the real estate brokerage powered by Rocket.

Housing payments are falling mainly because mortgage rates are falling. The weekly average mortgage rate dropped to a 10-month low of 6.58% last week in the wake of a weak July jobs report and a neutral inflation report. It’s worth noting that another reason for declining payments is the seasonality of home-sale prices; they typically peak in late spring and have begun falling by this time of year.

There are several reasons serious house hunters should consider jumping into the market:

• Mortgage rates are unlikely to fall further. Today’s mortgage rates have already priced in the Fed’s anticipated September interest rate cut; Redfin head of economics research Chen Zhao says the actual rate cut won’t move the needle. Homebuyers have gained about $20,000 in purchasing power since rates hit a peak in May; it’s a good time to lock in a payment.
• Home prices are rising. Monthly payments are falling despite home-sale prices increasing from a year ago. The median U.S. sale price was $394,498 during the four weeks ending August 17, up 1.9% year over year, the biggest increase in four months. Prices may continue accelerating because inventory is decelerating.
• Supply of for-sale homes is dwindling. New listings are up just 0.5% year over year, and while the total number of homes for sale is up 10.7%, that’s the smallest increase in nearly 18 months. Some would-be sellers are pulling back because demand is slow, and they don’t want to sell their homes for less money than expected.
• Homes are taking a long time to sell, giving buyers negotiating power—for now. The typical home is spending 42 days on the market before going under contract, a week longer than last year and the longest span for this time of year since 2019. Redfin agents report that for listings sitting longer than a few weeks, sellers are often willing to negotiate. They’re accepting offers under asking price and/or making concessions to close the deal.

“I’m telling serious buyers that they have leverage right now—and in the Bay Area, that has been unheard of for a long time,” said Josh Felder, a Redfin Premier agent in San Francisco. “There’s less competition than usual because of economic uncertainty, and the market is no longer tilted in sellers’ favor. I just submitted an offer for a client on a townhouse in Mountain View, which is in Google land and would have gotten between five and 10 offers a year ago. We offered close to the asking price with no competition, and got it. Prices are still high, but first-time buyers have a window.”

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-mortgage-rates-fall-to-10-month-low

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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250821879821/en/