US Monthly Housing Payments Retreat to Early-2024 Levels

On Thursday, Redfin reported that during the four-week period ending on September 8th, the median US monthly housing payment was $2,558—down nearly to where it was at the start of the year and down 1.3% from a year earlier.

While it’s a small drop, this is the second-biggest decline since May 2020, when the housing market was stumbling before the pandemic-driven boom (the biggest decline since then was two weeks ago, when payments declined 1.6%).

Housing payments are falling because mortgage rates are falling, Redfin said. Weekly average mortgage rates and daily average rates have both dropped to their lowest level in over a year in anticipation of the Fed cutting interest rates. Housing payments would be falling further if not for stubbornly high home prices: The median US home-sale price is $388,085, up 3.7% year-over-year and just a few thousand dollars shy of July’s all-time high.

According to Redfin analysis of current data, home prices remain elevated despite slow sales partly due to limited inventory. The total number of homes for sale is down nearly 30% from pre-pandemic levels, and while it’s up 16.7% from a year ago, that’s the smallest increase in five months.

Declining housing payments haven’t yet translated to an uptick in sales; pending home sales are down 7.8% annually, the biggest decline in nearly a year (except the prior 4-week period). That’s partly due to high home prices, but other factors are at play too. Redfin agents report that some would-be buyers are holding off because they’re confused about the new NAR rules, which went into effect on August 17th. Other house hunters are hoping mortgage rates will come down further before they buy.