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Buyers, Take Note: Mortgage Rates Are Falling, Home-Price Growth Is Cooling and Supply Is Outpacing Demand

Redfin economists say serious homebuyers have a window of opportunity to lock in a mortgage rate, as rates could fluctuate as more economic data is released in the coming weeks

SEATTLE--(BUSINESS WIRE)-- House hunters got some relief this week as the daily average mortgage rate dropped to its lowest level in nearly a year after a jobs report. That鈥檚 according to a new from , the real estate brokerage powered by Rocket.

A homebuyer on a $3,000 monthly budget can afford a $458,750 home with a 6.55% mortgage rate, roughly the daily average on Wednesday; that buyer has gained roughly $20,000 in purchasing power since mortgage rates hit a recent peak of 7.08% in May.

There are a few other bright spots for house hunters this week:

• Home-price growth is losing steam. The median U.S. asking price rose just 2.3% year over year during the four weeks ending August 3, one of the smallest increases in two years. Sellers have started pricing lower in response to the buyer鈥檚 market; Redfin economists predict sale prices will fall 1% by the end of the year. Additionally, just about one-quarter (26.6%) of homes are selling above asking price, down from 31% a year ago.
• There are than buyers in the market. The total number of homes for sale is up 8.5% year over year, while pending sales are down 1.2%.
• Many sellers are willing to negotiate. Redfin agents in many parts of the country, including the Bay Area, Phoenix, Washington, D.C. and coastal Florida, report that a lot of sellers are open to negotiating with buyers. Some are accepting offers under asking price or providing freebies to sweeten the deal, like money for closing costs or repairs, to get their home offloaded.

House hunters should keep in mind that the window of opportunity for buyers could be short. New listings have lost steam, staying essentially flat year over year, as would-be sellers realize they may not get the price they want for their home. Additionally, lower mortgage rates could bring more buyers and more competition. Mortgage-purchase applications have already increased, rising 2% week over week.

鈥淪erious homebuyers should consider taking this window of opportunity to act fast and lock in a mortgage rate at the lowest level we鈥檝e seen since last October,鈥� said Chen Zhao, Redfin鈥檚 head of economics research. 鈥淟ast week鈥檚 soft jobs report ups the chances of the Fed cutting interest rates in September. The market鈥檚 anticipation of that cut has already pushed mortgage rates down, and there鈥檚 no guarantee they鈥檒l fall further. There鈥檚 a chance mortgage rates could fluctuate when more economic data is released in the coming weeks.鈥�

For Redfin economists鈥� takes on the housing market, please visit Redfin鈥檚 鈥�鈥� page.

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About Redfin

Redfin is a technology-driven real estate company with the country's most-visited real estate brokerage website. As part of Rocket Companies (NYSE: RKT), Redfin is creating an integrated homeownership platform from search to close to make the dream of homeownership more affordable and accessible for everyone. Redfin鈥檚 clients can see homes first with on-demand tours, easily apply for a home loan with Rocket Mortgage, and save thousands in fees while working with a top local agent.

You can find more information about Redfin and get the latest housing market data and research at . For more information about Rocket Companies, visit .

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Contact Redfin

Redfin Journalist Services:

Kenneth Applewhaite

[email protected]

Source: Redfin