A soft jobs report and recession jitters sent mortgage rates down last week. Despite the small improvement in affordability, pending sales still posted their biggest year-over-year decline in 9 months–but the rate drop prompted some prospective buyers to start the house-hunting process.

(NASDAQ: RDFN) — Mortgage rates dropped to their lowest level since April 2023 early this week, falling to a daily average of 6.34% on August 5, according to a new report from Redfin, the technology-powered real estate brokerage. Rates fell after a weaker-than-expected jobs report stoked recession fears; they have since ticked up, but they're still near the lowest level in over a year.

Home prices are also falling from their peak: The median sale price was $389,750 during the four weeks ending August 4, more than $6,000 below early July’s all-time high. While that’s a typical seasonal decline, the year-over-year increase of 3.2% is the smallest in nine months, indicating that price growth has eased slightly.

Home sales have yet to improve as the affordability crunch eases. Pending sales are down 6.7% year over year, the biggest decline in nine months, and there wasn’t an increase in offers written with Redfin agents this past weekend after rates fell on Friday. But there are some signs that house hunters are coming off the sidelines at early stages of the homebuying process, and that pending sales could improve soon. Mortgage-purchase applications rose slightly over the last week on a seasonally adjusted basis. Redfin’s Homebuyer Demand Index–a measure of requests for tours and other buying services from Redfin agents–is down 13% year over year, but that’s the smallest decline in three months. Additionally, Redfin agents report rising interest in touring homes.

“Many of the buyers I’m working with are excited because they’ve been casually house hunting for a year, waiting for rates to come down before they make an offer. Now a lot of those buyers want to get in now, before rates get too low and cause more competition,” said Redfin Premier agent Shoshana Godwin. “One of my listings, which went on the market last week, had over 100 parties come through and received nine offers. Buyers are securing lower rates than they were a few months ago, but costs are still high enough that buyers are picky. If they're going to have a high monthly payment, they want a move-in ready home so they don't have to pay for upgrades.”

On the supply side, new listings are re-gaining some of the momentum they had lost in recent weeks. New listings of homes for sale are up 5.9% year over year, the biggest increase in five weeks. Redfin economists say now is a good time to jump into the market, while there’s a pile of stale inventory and rates have started dropping.

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

Key housing-market data

To view the full report, including charts, please visit: https://www.redfin.com/news/housing-market-update-mortgage-rates-fall-tours-increase

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/20240808412530/en/