The median housing payment in the United States has dropped by nearly $250 as mortgage rates declined.
The typical housing payment has declined to $2,588 in the four weeks ending Aug. 11. That is nearly $250 below the April peak and the lowest level recorded since February this year, per a recent report from Redfin.
The decline in housing payments is attributed to softening mortgage rates. The contract rate for the 30-year mortgage loan fell to 6.49% in the week ending Aug. 15, marking the lowest level recorded in over a year. The contract rate for the 15-year loan also declined to 5.66%.
The total number of homes for sale also increased by nearly 20% year-over-year. Furthermore, less than 30% of homes are selling above their list price compared to 35% from a year prior.
Buyers May Have More Room To Negotiate
Potential buyers could also see more relief as nearly two-thirds (64.7%) of available home listings are growing stale.
The stale inventory is growing the fastest in Florida and Texas. Specifically, 63% of listings in Dallas have been sitting on the market for at least 30 days in June. This is followed by four Florida metros, namely Tampa (70%), Fort Lauderdale (77%), Jacksonville (70%), and Orlando (69%). The growing number of stale inventory could give buyers more chances to negotiate concessions with their sellers.
Despite the positive signs in the housing market, mortgage-purchase applications are only up 16.8% week-over-week on a seasonally adjusted basis, according to a report from the Mortgage Bankers Association. Redfin's Homebuyer Demand Index--which measures requests for tours and services from real estate agents--also saw a 10% decline year-over-year.
"I was hoping more buyers would emerge when mortgage rates started declining. And while house hunting has picked up a bit, the increase isn't all that significant," Brynn Rea, a Redfin Premier agent in Spokane, WA, said in the report.
"Budgets are typically the most important factor for buyers, and homes are still really expensive for a lot of people. A lot of buyers are waiting to see if mortgage rates fall more if and when the Fed cuts interest rates, and to see what happens with the economy and the election later in the year."
As of July, the median sale price of homes is $442,451, up 4.0% year-over-year.
