Buy Now with Little Competition, or Bet on Rates Falling More?
Pending home sales are showing only modest growth, up 0.8% from last year, as buyers remain hesitant and wait for further mortgage rate cuts. Despite slower sales activity, the median U.S. home-sale price increased 2.2% year-over-year in mid-September, the sharpest rise in five months. Housing payments have also ticked up slightly to $2,590, near the lowest levels of 2025, due to a combination of lower mortgage rates and higher home prices. Supply remains tight, with new listings up just 1.1% and total active listings up 9.9%, the smallest increase since early 2024. This low inventory is keeping prices elevated, even as demand lags.
Mortgage rates have dropped to around 6.35%, the lowest in nearly a year, driven by weaker job data and the Federal Reserve’s recent rate cut. While this decline has boosted mortgage applications and slightly increased buyer activity, many remain on the sidelines in hopes of even lower rates. Agents caution that waiting may backfire if rates fall further, more buyers will re-enter the market, pushing prices higher and shifting leverage back to sellers. For now, the market remains in a delicate balance, with Redfin economists expecting mortgage rates to stay steady until more economic data, such as October’s jobs report, provides clearer direction.
