Mortgage Rates Drop to 10-Month Low, Pushing Down Monthly Housing Payments

Monthly payments are falling primarily because mortgage rates have dipped to a 10-month low. But home sales are still lackluster, declining slightly from a year ago. The typical homebuyer’s monthly mortgage payment is $2,614, the lowest level since January and down $224 from May’s all-time high, according to a new report from Redfin, the real estate brokerage powered by Rocket. Housing payments are falling mainly because mortgage rates are falling. The weekly average mortgage rate dropped to a 10-month low of 6.58% last week in the wake of a weak July jobs report and a neutral inflation report. It’s worth noting that another reason for declining payments is the seasonality of home-sale prices; they typically peak in late spring and have begun falling by this time of year. There are several reasons serious house hunters should consider jumping into the market: Mortgage rates are unlikely to fall further. Today’s mortgage rates have already priced in the Fed’s anticipated September interest rate cut; Redfin head of economics research Chen Zhao says the actual rate cut won’t move the needle. Homebuyers have gained about $20,000 in purchasing power since rates hit a peak in May; it’s a good time to lock in a payment. Home prices are rising. Monthly payments are falling despite home-sale prices increasing from a year ago. The median U.S. sale price was $394,498 during the four weeks ending August 17, up 1.9% year over year, the biggest increase in four months. Prices may continue accelerating because inventory is decelerating. Supply of for-sale homes is dwindling. New listings are up just 0.5% year over year, and while the total number of homes for sale is up 10.7%, that’s the smallest increase in nearly 18 months. Some would-be sellers are pulling back because demand is slow, and they don’t want to sell their homes for less money than expected. Homes are taking a long time to sell, giving buyers negotiating power—for now. The typical home is spending 42 days on the market before going under contract, a week longer than last year and the longest span for this time of year since 2019. Redfin agents report that for listings sitting longer than a few weeks, sellers are often willing to negotiate. They’re accepting offers under asking price and/or making concessions to close the deal. “I’m telling serious buyers that they have leverage right now—and in the Bay Area, that has been unheard of for a long time,” said Josh Felder, a Redfin Premier agent in San Francisco. “There’s less competition than usual because of economic uncertainty, and the market is no longer tilted in sellers’ favor. I just submitted an offer for a client on a townhouse in Mountain View, which is in Google land and would have gotten between five and 10 offers a year ago. We offered close to the asking price with no competition, and got it. Prices are still high, but first-time buyers have a window.” 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 6.61% (Aug. 20) Up from 6.53% a week earlier, but still near 10-month low Essentially flat Mortgage News Daily Weekly average 30-year fixed mortgage rate 6.58% (week ending Aug. 14) 10-month low Up from 6.49% Freddie Mac Mortgage-purchase applications (seasonally adjusted)   Essentially flat (+0.1%) from a week earlier (as of week ending Aug. 15) Up 23% Mortgage Bankers Association Redfin Homebuyer Demand Index   Down 1% from a month earlier (as of week ending Aug. 17) Down 8% A measure of tours and other homebuying services from Redfin agents Google searches of “homes for sale”   Down 10% from a month earlier (as of Aug. 20) Up 10% Google Trends Key housing-market data   U.S. highlights: Four weeks ending Aug. 17, 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 Aug. 17, 2025 Year-over-year change Notes Median sale price $394,498 1.9%   Median asking price $398,725 3.1%   Median monthly mortgage payment $2,614 at a 6.58% mortgage rate 4.1% Lowest level since January Pending sales 82,755 -0.7%   New listings 90,617 0.5%   Active listings 1,193,043 10.7% Smallest increase since March 2024 Months of supply 4.2 +0.6 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 32.1% Down from 35%   Median days on market 42 +6 days   Share of homes sold above list price 25.6% Down from 29%   Average sale-to-list price ratio 98.7% Down from 99.2%   Metro-level highlights: Four weeks ending Aug. 17, 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 (12.4%) Detroit (11%) Pittsburgh (8.8%) Montgomery County, PA (7.6%) Baltimore (6.1%) Oakland, CA (-4%) Dallas (-2.9%) West Palm Beach, FL (-1.8%) Portland, OR (-1.7%) Orlando, FL (-1.1%) Declined in 10 metros Pending sales Pittsburgh (9.8%) Columbus, OH (6.7%) Cleveland (6.6%) Phoenix (5.9%) Milwaukee (5.8%)   Houston (-18.7%) Miami (-16.4%) Seattle (-12.8%) San Diego (-8.8%) Orlando, FL (-8.6%)   New listings Montgomery County, PA (9.5%) Pittsburgh (8.8%) Baltimore (8.3%) Cleveland (7.6%) Columbus, OH (7.3%) Houston (-13.1%) Tampa, FL (-12.6%) Orlando, FL (-12.2%) West Palm Beach, FL (-10.8%) Atlanta (-8.1%)       To view the full report, including charts, please visit: https://www.redfin.com/news/housing-market-update-mortgage-rates-fall-to-10-month-low