Home-Price Growth Slows as Mortgage Rates Dip to Lowest Level in Over 2 Months

The median U.S. home-sale price rose just 3.5% year over year during the four weeks ending February 23, the smallest increase since September. That’s according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. Mortgage rates have declined to their lowest level in more than two months, dipping from 7.13% to 6.78% in the last two weeks alone and upping buyers’ purchasing power by thousands of dollars. Mortgage rates are coming down due to signals that the U.S. economy is slowing, and heightened recession fears. In addition to a bit of cost relief, another factor is working in buyers’ favor. House hunters have a bit more power to negotiate on sale price and terms as supply piles up in some parts of the country. There are 4.6 months of supply on the market, up from 4 months at this time last year, and the typical home is selling for roughly 2% less than its asking price. There are signs that slowing price growth, declining rates and more favorable conditions are bringing some house hunters back to the market. Redfin’s Homebuyer Demand Index—a seasonally adjusted measure of tours and other buying services from Redfin agents—has jumped to its highest level since the start of the year, and Google searches of “homes for sale” nationwide have hit their highest level since September. But home sales have yet to improve. Pending home sales are down 6.2% from a year earlier, in line with decreases Redfin has seen since the start of the year. Even though mortgage rates have declined a bit, the typical monthly housing payment is just $32 shy of its all-time high. Sales could pick up in the coming weeks if the increase in home tours turns into more offers and/or mortgage rates continue coming down slightly. Redfin agents in some parts of the U.S. are advising prospective buyers to jump in while they can because with today’s economic and political uncertainty, mortgage rates could rise above 7% again soon. And the pileup of supply could soon be depleted: New listings of homes for sale are up just 2.4% year over year this week, the smallest gain in a month. “My advice to buyers: If you’re thinking of purchasing a home in the next six months, don’t wait until the flowers start blooming,” said Alison Williams, a Redfin Premier agent in Sacramento, CA. “The market will heat up as we get closer to spring. Now is the time to potentially negotiate down the price of a home, save money on closing costs or get the sellers to cover issues uncovered in the inspection. There are bidding wars for relatively affordable homes, under $400,000 or so, and for upscale, fully renovated homes in popular neighborhoods. But for everything in between, buyers are looking online and touring, but not jumping on them. The buyers who are jumping are getting deals.” For Redfin economists’ takes on the housing market, please visit Redfin’s “From Our Economists” page. Leading indicators Indicators of homebuying demand and activity   Value (if applicable) Recent change Year-over-year change Source Daily average 30-year fixed mortgage rate 6.78% (Feb. 26) Lowest level since Dec. 10 Down from 7.13% Mortgage News Daily Weekly average 30-year fixed mortgage rate 6.85% (week ending Feb. 20) Lowest level in 2 months Down from 6.9% Freddie Mac Mortgage-purchase applications (seasonally adjusted)   Unchanged from a week earlier (as of week ending Feb. 21) Up 3% Mortgage Bankers Association Redfin Homebuyer Demand Index (seasonally adjusted)   Up 5% from a month earlier (as of week ending Feb. 23) Down 4%     Redfin Homebuyer Demand Index, a measure of tours and other homebuying services from Redfin agents Touring activity   Up 19% from the start of the year (as of Feb. 24) At this time last year, it was up 23% from the start of 2024 ShowingTime, a home touring technology company Google searches for “home for sale”   Up over 20% from a month earlier (as of Feb. 24) Up 10%   Google Trends Key housing-market data U.S. highlights: Four weeks ending Feb. 23, 2025 Redfin’s national metrics include data from 400+ U.S. metro areas, and are based on homes listed and/or sold during the period. Weekly housing-market data goes back through 2015. Subject to revision.   Four weeks ending Feb. 23, 2025 Year-over-year change Notes Median sale price $377,250 3.5% Smallest increase since September Median asking price $412,253 5.8%   Median monthly mortgage payment $2,762 at a 6.85% mortgage rate 5.1% $32 shy of all-time high Pending sales 73,415 -6.2%   New listings 81,553 2.4%   Active listings 907,659 9.7% Smallest increase in nearly a year Months of supply 4.6 +0.7 pts. 4 to 5 months of supply is considered balanced, with a lower number indicating seller’s market conditions Share of homes off market in two weeks 32.8% Down from 36%   Median days on market 56 +6 days; near longest span since March 2020   Share of homes sold above list price 21.7% Down from 24%   Average sale-to-list price ratio 98.1% Down from 98.3%   Metro-level highlights: Four weeks ending Feb. 23, 2025 Redfin’s metro-level data includes the 50 most populous U.S. metros. Select metros may be excluded from time to time to ensure data accuracy.   Metros with biggest year-over-year increases Metros with biggest year-over-year decreases Notes Median sale price Cleveland (13.1%) San Jose, CA (12.6%) Nassau County, NY (12%) Detroit (10.8%) Milwaukee (10.5%) Austin, TX (-5%) Jacksonville, FL (-2.8%) Tampa, FL (-2.1%) Atlanta (-0.3%) Declined in 4 metros Pending sales San Francisco (26.9%) Los Angeles (12.2%) Anaheim, CA (10.4%) Riverside, CA (3.5%) Columbus, OH (1.6%) Phoenix (0.3%) Houston (-17%) Miami (-16.6%) Minneapolis (-16.1%) Jacksonville, FL (-16.1%) Washington, D.C. (-15.5%) Increased in 6 metros New listings Phoenix (23%) Los Angeles (22.2%) Sacramento, CA (19.4%) Denver (16.6%) Anaheim, CA (16.2%) Detroit (-21.4%) Warren, MI (-13.1%) Montgomery County, PA (-10.5%) Newark, NJ (-8.3%) Fort Worth, TX (-8.2%) Increased in 19 metros   To view the full report, including charts, please visit: https://www.redfin.com/news/housing-market-update-early-stage-demand-improves-rates-fall