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modest easing in mortgage rates and a slowdown in price growth have created a brief breathing space in the U.S. housing market, yet both buyers and sellers remain wary.
Active listings slipped 1.4 % in August, the steepest monthly decline since 2023, according to Redfin. “High housing costs and economic jitters have rattled buyers, and that unease has spilled over to sellers,” said Redfin’s Chen Zhao. He projects existing‑home sales to finish the year at roughly 4.05 million units—essentially flat versus 2024 and the weakest sales year since 1995.
The market is stuck in a stalemate: buyers hesitate because mortgage rates and home prices are still high—prices are up 1.7 % year‑over‑year at $440,004, while the average 30‑year fixed rate fell to 6.59 % in August, the lowest in ten months (down from 7 % in May). Sellers, fearing they won’t recoup their home’s value, are either cutting asking prices or pulling listings. Delistings jumped 47 % nationally in June YoY and are up 34 % year‑to‑date, a trend highlighted by Realtor.com’s Jake Krimmel: “Sellers face a trade‑off—adjust to the market and sell for less, or hold out and risk sitting indefinitely.”
Redfin data shows demand remains sluggish, with sales still below pre‑pandemic levels. The slight rate dip hasn’t yet sparked a rebound, though Chen notes that continued declines could lift sales above last year’s figures.
The “magic” rate that would ignite buyer activity is debated. Chicago agent Beth Behling cites 6 % as the threshold, while others argue 5 % would have a more noticeable impact. Zillow’s early‑August analysis suggested rates would need to drop to about 4.43 % to make an average home affordable for a typical buyer, a figure Zillow’s analyst Anushna Prakash called “unrealistic” given the magnitude of the drop required. Real‑estate agent Philippa Main warned that even a mid‑4 % rate is unlikely soon, and that historic price highs would still deter many.
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