Mortgage rates fell to a four-month low of 4.99% during the week ending August 4, motivating some homebuyers to inch back into the purchasing process. Redfin’s Homebuyer Demand Index rose 7 points during the last week of July as mortgage purchase applications increased for the first time in five weeks, but pending sales are still posting significant yearly declines, Redfin reports. Though prospective buyers aren’t rushing back into home purchases, Google searches for “homes for sale” are up 9% since late May, and requests for home tours are also on the rise.
Still, the median home sale price rose 8% year-over-year to $380,187 in July, while new for-sale listings fell 11% from a year earlier. As more inventory floods the for-sale market and sellers continue to lower their asking prices, buyers could soon make a comeback in a cooling market.
So far this rebound has not moved through to actual home sales. Pending sales in July posted their largest decline since May 2020. Home sellers are also reluctant to enter the market—new listings fell 11% from a year ago, the largest decline since June 2020.
“Homebuyers may catch a break this month as rates have come down nearly a point from the recent high on fears of a recession,” said Redfin Deputy Chief Economist Taylor Marr. “There are deals to be had on some homes that have been sitting on the market with reduced prices. General economic uncertainty may continue to keep a lid on homebuyer demand and keep mortgage rates volatile, but the labor market remains a beacon of strength in the economy and the housing market in particular.”