Mortgage Rates Stay Flat as Housing Market Enters a ‘Buyer-Friendly’ Fall

Mortgage rates stayed flat at 6.35% for a 30-year fixed home loan for the week ending Sept. 5, according to Freddie Mac.

“Mortgage rates remained flat this week as markets await the release of the highly anticipated August jobs report,” Sam Khater, Freddie Mac’s chief economist, said in a statement. “Even though rates have come down over the summer, home sales have been lackluster. On the refinance side, however, homeowners who bought in recent years are taking advantage of declining mortgage rates in order to lower their monthly payments.”

With mortgage rates expected to decline even further, more buyers are expected to enter the market in the coming months, according to Realtor.com® economist Jiayi Xu in her recent analysis.

This should breathe life into the sluggish summer housing market, which will give “buyers more options as the autumn approaches,” says Realtor.com senior economist Joel Berner.

As we look ahead toward fall, here’s a snapshot of the latest housing market data and what it means for homebuyers and sellers in the latest installment of our “Weekly Housing Market Update.”

Mortgage rate news

In the first days of September, the yield on 10-year Treasuries slipped below 3.9% “amid expectations of rate cuts coming out of upcoming Federal Reserve meetings,” Berner says.

The next meeting is less than two weeks away, on Sept. 17–18.

The central bank is likely to respond to the recent slowdown in inflation and uptick in unemployment by lowering interest rates, according to Berner, and this development allows for some much anticipated easing of mortgage rates. (While the Fed doesn’t set mortgage rates, Fed rates and mortgage rates tend to move in the same direction.)

Despite a bumpy start, the 2024 summer housing market is wrapping up “by shifting to a more buyer-friendly environment,” says Xu.

Home prices continue to drop

Median list prices fell 0.9% year over year for the week ending Aug. 31. (In August, the national median list price was $429,990.)

For the 14th week in a row, the median list price in the U.S. was less than or equal to what it was in the corresponding week of 2023.

“The share of listings with price reductions reached the highest for an August in over five years as sellers adjust asking prices to better meet what buyers are looking for,” Xu says.

The number of homes for sale rises

The total number of houses for sale shot up by 34.6% for the week ending Aug. 31, marking a 43-week streak of increasing for-sale homes compared with the same time last year.

Meanwhile, fresh listings new to the market spiked by 5.5% for the week ending Aug. 31 year over year.

Mortgage rates are anticipated to decline through the rest of the year, which could motivate more hesitant homeowners to sell, says Xu.

“However, we don’t foresee a significant increase in selling activity until next spring,” says Xu, “when rates are likely to be even lower, and the typical seasonal rise in inventory occurs.”

The pace of the market slows down

Homes spent six days more on the market for the week ending Aug. 31 compared with the same time in 2023.

The typical home spent 53 days on the market in August, which was the slowest August in five years.

“Homes continue to take longer to sell than one year ago,” says Xu. “With more options available and lower mortgage rates on the horizon, buyers feel less pressure to act quickly.”