Mortgage rates ticked down slightly from 6.09% to 6.08% for a 30-year fixed home loan in the week ending Sept. 26, according to Freddie Mac.
“Although this week’s decline was slight, the 30-year fixed-rate mortgage trended down to its lowest level in two years,” Sam Khater, Freddie Mac’s chief economist, said in a statement. “Given the downward trajectory of rates, refinance activity continues to pick up, creating opportunities for many homeowners to trim their monthly mortgage payment. Meanwhile, many looking to purchase a home are playing the waiting game to see if rates decrease further as additional economic data is released over the next several weeks.”
Ever since the Federal Reserve slashed rates last week for the first time since 2020, “the market is abuzz,” says Realtor.com® senior economic research analyst Hannah Jones in her recent analysis.
In fact, the very Best Time To Buy—Sept. 29 to Oct. 5, according to research—is just days away.
“For buyers looking to close on a home before the year’s end, this period offers a favorable mix of market conditions more advantageous to buyers compared to the rest of the year,” says Realtor.com economist Jiayi Xu.
As that anticipated homebuyer high point draws closer, here’s a snapshot of the latest housing market data and what it means for homebuyers and sellers in our latest “Weekly Housing Market Update.”
Mortgage rates improve buying power
Since mortgage rates have dropped last year, buying power has increased.
“Recent rate improvements have boosted home shopper buying power by more than $74,000 compared to October 2023, when rates peaked at 7.79%,” says Jones.
In other words, the typical buyer could afford a home priced $74,000 higher than the October 2023 median price for the same housing payment.
“Falling rates will continue to improve buying power, which may entice buyers on the cusp,” says Jones.
Prices are dropping
As mortgage rates ease, home prices are following suit.
In August, the national median list price was $429,990—and median list prices dropped 1% year over year for the week ending Sept. 21.
This is the 17th week in a row that the median listing price in the U.S. was less than or equal to what it was in the corresponding week of 2023.
The number of listings with price cuts grew by nearly 30% the week ending Sept. 21 compared with the same time last year, as “sellers are adjusting prices to encourage activity on their listings,” says Jones.
The number of homes for sale increases
For the week ending Sept. 21, the total number of homes for sale rose 33.2% compared with the same time last year.
This means there are more houses for sale than in any week since January 2020, so buyers have an embarrassment of riches.
The market also saw an uptick in fresh listings, with 8.0% more houses hitting the market for the week ending Sept. 21 compared with last year.
This marks a streak of 46 weeks in a row that the housing stock has increased.
“With mortgage rates at their lowest level in nearly two years, eager sellers are taking the chance to get their home listed, hoping to catch some of the fall buyer activity,” says Jones. “This trend is expected to continue as rates ease further and more sellers are ‘unlocked.’”
Time on the market grows
In August, the typical home spent 53 days on the market.
During the week ending Sept. 21, houses spent six days longer on the market than they did at the same time last year.
“Buyers have been holding off, waiting for more affordable housing conditions,” says Jones.
However, there are ample signs that change is on the horizon.
“The annual gap in time on market shrank by two days this week compared to the previous week, suggesting some buyers may be reentering the market,” says Jones. “With more options available and mortgage rates at their lowest level in more than a year, buyers may be feeling ready to act.”
Julie Taylor, realtor.com