Mortgage rate drop lures skittish buyers back to housing market, report shows

Redfin

08/08/2024 15:21

Aug 8 (Reuters) - A drop in mortgage rates to over
one-year lows has prompted some prospective buyers to resume
house-hunting, a report from real estate brokerage Redfin showed
on Thursday.
    
    WHY IT'S IMPORTANT 
    As of Aug. 7, the popular 30-year fixed mortgage rate is
near its lowest levels in months at 6.58%, after a
weaker-than-expected jobs report stoked recession fears. Despite
the small improvement in affordability, pending sales still
posted their biggest year-over-year decline in nine months, the
Redfin report said. 
    However, the rate drop is luring some prospective buyers
back to the housing market, especially with home prices falling
from their peak, triggered by an affordability crisis. 
    
    CONTEXT
    More home buyers are entering the market following a period
of depressed demand when mortgage rates went over 7%.
    On the supply side, new listings are regaining some of the
momentum they had lost in recent weeks. For months now, home
owners had been holding onto lower fixed mortage rates secured
on properties during an era of cheap debt in the face of higher
rates currently.
    
    BY THE NUMBERS 
    - The median sale price was $389,750 during the four weeks
ended Aug. 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. 
    - New listings of homes for sale are up 5.9% year over year,
the biggest increase in five weeks. 
    
    KEY QUOTE
    "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 ... before rates get too low and cause
more competition," said Shoshana Godwin, Redfin premier agent.

 (Reporting by Ananta Agarwal in Bengaluru; Editing by Maju
Samuel)
 ((Ananta.agarwal@thomsonreuters.com;))