A homebuyer on a $3,000 budget has gained $26,000 since last year as mortgage rates drop to the low-6% range. But pending home sales are still slipping.
Lower mortgage rates are curbing growth in monthly housing payments. The typical U.S. monthly payment is $2,556, up 0.6% year over year, the smallest increase in three months. That’s according to a new report from Redfin, the real estate brokerage powered by Rocket.
The daily average mortgage rate dropped to 6.17% this week, near the lowest level in three years. A homebuyer on a $3,000 budget can afford a $473,750 home at today’s mortgage rate, compared to the $447,750 home they could have bought one year ago, when rates were around 6.85%. Compared to one month ago, buyers have gained $9,500 in purchasing power; they could have bought a $464,250 home with rates sitting near 6.4%.
Despite more purchasing power, would-be buyers remain on the sidelines
Pending U.S. home sales fell 0.7% year over year during the four weeks ending October 19, the third straight week of declines.
There are a few reasons buyers are wary. One, the forces pushing mortgage rates down—economic uncertainty and political tensions—are also making some house hunters feel uneasy about making a major purchase. Buyers are also facing stubbornly high prices, with the median home-sale price up 2% year over year, the biggest increase in six months.
The selling side is holding up better. New listings rose 4.6%, the biggest increase in nearly five months, as sellers hope buyers pounce on lower rates. Nationwide, there are half a million more home sellers than buyers.
The big gap between home sellers and buyers, along with the improvement in purchasing power, make it a good time for buyers who can afford today’s high housing costs to jump into the market. Redfin agents in many parts of the country report that it feels like a buyer’s market, with sellers open to lowering the sale price and providing concessions.
“Buyers are scoring deals, especially those who can pay all cash and/or those who are open to new construction,” said Amanda Peterson, a Redfin Premier agent in Dallas. “One recent all-cash buyer paid $500,000 for a condo that was appraised at $685,000—and the seller agreed to pay upfront for six months of pricey HOA dues. And builders are offering steep discounts on new homes, especially in areas where they already have a lot of inventory and are still actively building. Builders are dropping prices, giving up to $20,000 in concessions, throwing in appliances, and buying down mortgage rates, sometimes to below 4%.”
Leading indicators
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Indicators of homebuying demand and activity |
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Value (if applicable) |
Recent change |
Year-over-year change |
Source |
|
Daily average 30-year fixed mortgage rate |
6.17% (Oct. 22) |
Near 3-year now |
Down from 6.82% |
Mortgage News Daily |
|
Weekly average 30-year fixed mortgage rate |
6.27% (week ending Oct. 16) |
Near lowest level in a year |
Down from 6.44% |
Freddie Mac |
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Mortgage-purchase applications (seasonally adjusted) |
|
Down 5% from a week earlier (as of week ending Oct. 17) |
Up 20% |
Mortgage Bankers Association |
|
Redfin Homebuyer Demand Index |
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Up about 2% from a month earlier (as of week ending Oct. 19) |
Down 12% |
A measure of tours and other homebuying services from Redfin agents |
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Google searches of “homes for sale” |
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Unchanged from a month earlier (as of Oct. 19) |
Up 20% |
Google Trends |
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Touring activity |
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Up 12% from the start of the year (as of Oct. 19) |
At this time last year, it was up 2% from the start of 2024 |
ShowingTime |
Key housing-market data
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U.S. highlights: Four weeks ending Oct. 19, 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. |
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Four weeks ending Oct. 19, 2025 |
Year-over-year change |
Notes |
|
Median sale price |
$391,250 |
2% |
Biggest increase in 6 months |
|
Median asking price |
$399,675 |
2.9% |
Biggest increase in 5 months |
|
Median monthly mortgage payment |
$2,556 at a 6.27% mortgage rate |
0.6% |
Nearly $300 below May’s record high |
|
Pending sales |
77,167 |
-0.7% |
Biggest decline in 4 months |
|
New listings |
88,195 |
4.6% |
Biggest increase in nearly 5 months |
|
Active listings |
1,206,191 |
7.1% |
Smallest increase since Feb. 2024 |
|
Months of supply |
4.6 |
+0.4 pts. |
4 to 5 months of supply is considered balanced, with a lower number indicating seller’s market conditions |
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Share of homes off market in two weeks |
30.3% |
Down from 32% |
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Median days on market |
48 |
+6 days |
|
|
Share of homes sold above list price |
23% |
Down from 26% |
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Average sale-to-list price ratio |
98.4% |
Down from 98.7% |
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Metro-level highlights: Four weeks ending Oct. 19, 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. |
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Metros with biggest year-over-year increases |
Metros with biggest year-over-year decreases |
Notes |
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Median sale price |
Cleveland (12%) Detroit (8.3%) Newark, NJ (7.7%) San Francisco (6.7%) Providence, RI (6%) |
Dallas (-5.4%) Jacksonville, FL (-3.7%) Fort Lauderdale, FL (-1.9%) Miami (-1.8%) Denver (-1.7%) |
Declined in 12 metros |
|
Pending sales |
Tampa, FL (32.9%) West Palm Beach, FL (18.5%) San Francisco (12.9%) Pittsburgh (10.5%) Fort Lauderdale, FL (8.8%) |
Seattle (-17.3%) San Antonio (-17%) Denver (-13.5%) Minneapolis (-8.8%) New York (-8.7%) |
Pending sales rose significantly in coastal Florida largely because two major hurricanes stalled the state’s housing market at this time last year |
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New listings |
Tampa, FL (34.6%) Providence, RI (11.2%) West Palm Beach, FL (11.1%) Pittsburgh (10.2%) Phoenix (9.6%) |
Denver (-12.8%) San Francisco (-9.4%) Anaheim, CA (-7.8%) San Jose, CA (-7.8%) San Diego (-7.2%) |
New listings rose significantly in coastal Florida largely because two major hurricanes stalled the state’s housing market at this time last year |
To view the full report, including an interactive graphic showing how purchasing power changes at various mortgage rates, along with other charts, please visit: https://www.redfin.com/news/housing-market-update-mortgage-rates-drop-buyers-stay-on-sidelines
