Redfin reports lower rates haven’t yet brought homebuyers off the sidelines, but hope is in the air as spring approaches

The weekly average mortgage rate has dropped to 6.01%, its lowest level since September 2022. That has pushed the median U.S. monthly housing payment down to $2,599, 2.6% lower than a year ago, according to a new report from Redfin, the real estate brokerage powered by Rocket. Wages are nearly 4% higher than they were a year ago, improving affordability further.

Homebuyers have gained $34,000 in purchasing power since last year, when rates were sitting around 6.9%.

Falling rates may bring some house hunters out of the woodwork in the coming weeks, especially as the spring homebuying season begins. But for now, a lot of would-be buyers are staying on the sidelines. Pending home sales dropped 5.5% annually during the four weeks ending February 22, the biggest decline in over a year. Pending sales are falling in all but seven of the 50 most populous metros. Some sellers are holding back, too, with new listings down 2.8% year over year.

Even though rates have come down and affordability is improving, prospective buyers have faced some headwinds since the start of the year. One, home-sale prices are still rising; they’re up 1% year over year, counteracting some of the progress made by falling mortgage rates. Two, some Americans are jittery about economic uncertainty, including concerns about layoffs and the stock market. Three, the winter has been unusually cold and snowy in many parts of the country.

“Nobody wants to go out and search for homes in ‘snowcrete,’” said Patricia Ammann, a Redfin Premier agent in Arlington, VA. “Severe winter weather has hit demand hard. We’re also still feeling some effect from last year’s federal government layoffs: People who lost their jobs were not in the housing market, and people who still had their jobs were worried about getting laid off. But those nerves are easing; I’m starting to see house hunters—especially affluent people with solid jobs—get serious about their search. There’s competition for fixed-up houses in desirable neighborhoods.”

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-mortgage-rates-fall-affordability-improves

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 https://www.redfin.com/news. For more information about Rocket Companies, visit https://www.rocketcompanies.com.

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