Redfin Reports Typical Homebuyer’s Monthly Payment Drops to Lowest Level in 4 Months

Rhea-AI Summary

Redfin reports that the typical U.S. homebuyer's monthly housing payment has dropped to $2,671, the lowest level in four months. This decrease is attributed to falling mortgage rates, which have declined to 6.77%, the lowest since March. Despite this and a 6.1% year-over-year increase in new listings, homebuyers remain hesitant. Pending home sales are down 5.7% year-over-year, the biggest decline in nearly nine months, while mortgage-purchase applications have decreased by 15%.

The report highlights that many potential buyers are waiting on the sidelines due to home-sale prices being close to their all-time high and political uncertainty surrounding the upcoming presidential election. Some buyers are even delaying purchases until after the election, citing concerns about economic stability and potential policy changes.

Positive

• Typical homebuyer's monthly housing payment decreased to $2,671, the lowest in four months
• Mortgage rates declined to 6.77%, the lowest level since March
• New listings increased by 6.1% year-over-year, improving inventory

Negative

• Pending home sales down 5.7% year-over-year, biggest decline in nearly nine months
• Mortgage-purchase applications decreased by 15% year-over-year
• Home-sale prices remain close to their all-time high, deterring potential buyers

Insights

Financial Analyst

The latest Redfin report reveals a complex housing market landscape with some positive indicators but lingering challenges. The typical U.S. homebuyer's monthly housing payment has dropped to $2,671, its lowest level in four months, primarily due to declining mortgage rates. This 4.6% year-over-year increase is significantly lower than recent peaks, potentially improving affordability for some buyers.

However, the market faces headwinds. Pending home sales are down 5.7% year-over-year, the largest decline in nearly nine months. This suggests that despite improved affordability, many buyers remain hesitant. Factors contributing to this hesitancy include:

• Home sale prices near record highs ($395,500, up 4.4% year-over-year)
• Economic and political uncertainty ahead of the upcoming presidential election
• Mortgage purchase applications down 15% year-over-year

On the supply side, new listings are up 6.1% year-over-year, potentially giving buyers more options. However, with months of supply at 3.6, the market still favors sellers overall.

For investors, this mixed picture suggests caution. While lower mortgage rates could stimulate demand, persistent high prices and economic uncertainty may continue to suppress buyer activity in the near term.

Market Research Analyst

The housing market is showing signs of a gradual shift, but it's not a clear-cut buyer's or seller's market yet. Let's break down some key metrics:

Positive indicators for buyers:

• Mortgage rates declining (6.77% weekly average, lowest since March)
• New listings up 6.1% year-over-year
• Active listings up 18.7% year-over-year
• Share of homes sold above list price down to 31.2% from 36% last year

Challenges for buyers:

• Median sale price still up 4.4% year-over-year
• Months of supply at 3.6 (below the 4-5 month balanced market threshold)

The regional variations are striking. While some markets like Detroit and Providence are seeing double-digit price increases, others like Austin and Dallas are experiencing price declines. This underscores the importance of local market analysis for investors.

The hesitancy among buyers, despite improving affordability, suggests underlying economic concerns. The mention of buyers waiting until after the presidential election indicates that political and economic uncertainty is weighing heavily on consumer confidence in the housing market.

For the real estate industry, this environment may require more creative strategies to stimulate transactions and navigate the uncertain landscape ahead.

Monthly housing payments are falling as mortgage rates decline, but many house hunters remain on the sidelines, with pending sales posting their biggest drop in nearly nine months

SEATTLE--(BUSINESS WIRE)-- (NASDAQ: RDFN) — The typical U.S. homebuyer’s monthly housing payment was $2,671 during the four weeks ending July 21, the lowest level in four months and down $166 from the record high set at the end of April. That’s according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.

Housing payments are falling because mortgage rates are falling: The weekly average mortgage rate has declined to 6.77%, its lowest level since March, as inflation cools.

Buyers also have more homes to choose from: New listings are up 6.1% year over year, and more listings are growing stale, giving house hunters the opportunity to negotiate. But even though housing payments are declining and inventory is improving, homebuyers remain hesitant. Pending home sales are down 5.7% year over year, the biggest decline in nearly nine months, and mortgage-purchase applications are down 15% (purchase applications are down 4% week over week).

Many would-be buyers are still waiting on the sidelines largely because even though mortgage rates are coming down a bit, home-sale prices are just shy of their record all-time high. Additionally, Redfin agents say some house hunters are waiting until after the upcoming presidential election to buy because they don’t want to make a large purchase in the midst of political and economic uncertainty.

“I’m working with several buyers who are waiting for the election before they make a move,” said Matthew Purdy, a Redfin Premier agent in northern Colorado. “Some of them say they’ll only buy a home if their candidate wins. Others are waiting because they feel the economy and housing market are shaky, and hope it will improve after the election. I am working with a few foreign buyers who are wary about investing any more money in U.S. real estate before they see who takes office.”

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

Indicators of homebuying demand and activity
	Value (if applicable)	Recent change	Year-over-year change	Source
Daily average 30-year fixed mortgage rate	6.9% (July 24)	Near lowest level since February; down from 7.14% 3 weeks earlier	Unchanged from 6.9%	Mortgage News Daily
Weekly average 30-year fixed mortgage rate	6.77% (week ending July 18)	Down from 6.89% a week earlier	Essentially unchanged from 6.78%	Freddie Mac
Mortgage-purchase applications (seasonally adjusted)		Decreased 4% from a week earlier (as of week ending July 19)	Down 15%	Mortgage Bankers Association
Redfin Homebuyer Demand Index (seasonally adjusted)		Essentially unchanged from a month earlier (as of week ending July 21)	Down 16%	Redfin Homebuyer Demand Index, a measure of requests for tours and other homebuying services from Redfin agents
Touring activity		Up 19% from the start of the year (as of July 22)	At this time last year, it was up 15% from the start of 2023	ShowingTime, a home touring technology company
Google searches for “home for sale”		Up 12% from a month earlier (as of July 22)	Down 15%	Google Trends

Key housing-market data

U.S. highlights: Four weeks ending July 21, 2024 Redfin’s national metrics include data from 400+ U.S. metro areas, and is based on homes listed and/or sold during the period. Weekly housing-market data goes back through 2015. Subject to revision.
	Four weeks ending July 21, 2024	Year-over-year change	Notes
Median sale price	$395,500	4.4%	$1,000 below all-time high set during the 4 weeks ending July 7
Median asking price	$401,250	4.9%
Median monthly mortgage payment	$2,671 at a 6.77% mortgage rate	4.6%	Lowest level since March; $166 below all-time high set during the 4 weeks ending April 28
Pending sales	81,224	-5.7%	Biggest decline in nearly 9 months
New listings	92,972	6.1%
Active listings	985,303	18.7%	Smallest increase in 3 months
Months of supply	3.6	+0.7 pts.	4 to 5 months of supply is considered balanced, with a lower number indicating seller’s market conditions
Share of homes off market in two weeks	38.3%	Down from 44%
Median days on market	33	+5 days
Share of homes sold above list price	31.2%	Down from 36%
Share of homes with a price drop	6.7%	+1.8 pts.	Highest level on record
Average sale-to-list price ratio	99.5%	-0.5 pts.

Metro-level highlights: Four weeks ending July 21, 2024 Redfin’s metro-level data includes the 50 most populous U.S. metros. Select metros may be excluded from time to time to ensure data accuracy.
	Metros with biggest year-over-year increases	Metros with biggest year-over-year decreases	Notes
Median sale price	Detroit (15.4%) Providence, RI (14.3%) New Brunswick, NJ (13.2%) Newark, NJ (13%) Milwaukee (12.4%)	Austin, TX (-3.6%) Dallas (-1.2%)	Declined in 2 metros
Pending sales	Newark, NJ (7.1%) San Jose, CA (4%) Boston (3.1%) Cincinnati, OH (2.3%) San Francisco (1.7%) Los Angeles (1.4%) Columbus, OH (0.5%)	Houston (-28%) Minneapolis (-16.1%) West Palm Beach, FL (-15.7%) Virginia Beach, VA (-14.3%) Atlanta (-13.6%)	Increased in 7 metros
New listings	San Jose, CA (25.8%) Las Vegas (20.6%) Miami (17.1%) Phoenix (16.2%) Jacksonville, FL (16.1%)	Atlanta (-14.2%) Houston (-10.5%) Detroit (-4%) Chicago (-3.1%) Warren, MI (-2.5%)	Declined in 8 metros

To view the full report, including charts please visit:

https://www.redfin.com/news/housing-market-update-monthly-payment-mortgage-rates-drop

About Redfin

Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, title insurance, and renovations services. We run the country's #1 real estate brokerage site. Our customers can save thousands in fees while working with a top agent. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home can have our renovations crew fix it up to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we've saved customers more than $1.6 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 4,000 people.

Redfin’s subsidiaries and affiliated brands include: Bay Equity Home Loans®, Rent.™, Apartment Guide®, Title Forward® and WalkScore®.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email press@redfin.com. To view Redfin's press center, click here.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240725423938/en/

Contact Redfin

Redfin Journalist Services:

Kenneth Applewhaite

press@redfin.com

Source: Redfin

FAQ

What is the current typical monthly housing payment for U.S. homebuyers according to Redfin (RDFN)?

According to Redfin's report, the typical U.S. homebuyer's monthly housing payment is $2,671 as of July 21, 2024, which is the lowest level in four months.

How have pending home sales changed year-over-year as reported by Redfin (RDFN)?

Redfin reports that pending home sales are down 5.7% year-over-year, which is the biggest decline in nearly nine months.

What is the current average 30-year fixed mortgage rate according to Redfin's (RDFN) report?

The report states that the weekly average 30-year fixed mortgage rate has declined to 6.77%, its lowest level since March.

How have new listings changed year-over-year according to Redfin's (RDFN) latest data?

Redfin's report indicates that new listings have increased by 6.1% year-over-year.