P
ending home sales are still sluggish, but mortgage applications and home touring activity have picked up as 30-year rates hover near 10-month lows. Key points:

    The 30-year fixed-rate mortgage has dropped to 6.56%, its lowest level since October 2024, ahead of potential interest rate cuts in September.

    Despite lower rates, pending sales slowed between June and July due to ongoing housing affordability issues.

    Home touring activity is up, indicating buyers are still interested in exploring options heading into the fall.

    Mortgage applications have shown some signs of life, with seasonally adjusted purchase applications ticking up 2% from the previous week and increasing 25% year-over-year.

    Buyer hesitancy persists despite lower rates, with confidence also playing a role. Uncertainty around jobs, inflation, and the economy is keeping many on the sidelines.

    The market is "stuck" for now, with sellers feeling stuck due to lack of offers and buyers feeling stuck due to high prices even with more inventory.

    There's hope for an uptick before the year ends, with Redfin's Homebuyer Demand Index up 3% month-over-month in August. However, demand levels have not increased in all markets, suggesting potential buyers are still hesitating in some areas.

    Those ready to buy will find less competition and greater negotiating power in many locations, particularly in the South where 27 major metro areas have shifted into neutral or buyer-friendly territory.