H
omebuyer demand showed significant improvement in September, potentially signaling the start of a market recovery. This uptick was evident across various indicators, including mortgage rate locks and purchase applications. The average 30-year fixed mortgage rate dropped to around 6 percent, its lowest level in two years, driving homebuyers to take action.

    Redfin's Homebuyer Demand Index reached its highest point since April, with a notable 9 percent month-over-month increase. This growth was fueled by declining mortgage rates, which have made homes more affordable for new buyers. The benchmark monthly payment decreased to approximately $2,500, a nearly 6 percent drop from the previous year.

    While pending home sales were flat year-over-year for the four weeks ending on September 29, some of the nation's most populous metros saw annual increases in pending sales. Phoenix and San Jose led this trend with 13 and 12 percent rises, respectively. However, climate-related issues and rising insurance costs continue to challenge certain markets.

    Despite these developments, challenges persist for buyers and sellers alike. The median asking price rose 5.3 percent year-over-year, the largest increase since February. Inventory remains a concern, with a 4.2-month supply of homes available – the highest level since February – but active listings increased annually by the smallest amount since April.