U.S. mortgage payments hit lowest level of 2025 as rates fall

Investing.com -- Falling mortgage rates have pushed the median U.S. monthly mortgage payment down to $2,616, its lowest level since January, according to a new report from Redfin.

The weekly average mortgage rate has dropped to 6.58%, a 10-month low, while the daily average rate stood at 6.51% as of Tuesday.

This decline in housing costs has started to bring some buyers back to the market. Pending home sales rose 1.6% year over year during the four weeks ending August 27, marking two consecutive months of increases after declines through most of 2025.

Redfin’s Homebuyer Demand Index, which measures tours and other buying services, has increased about 3% from a month ago. Home tours are also rising at a faster pace compared to the same period last year.

"Buyers are circling," said Ali Mafi, a Redfin Premier agent in San Francisco. "House hunters are feeling more confident about buying a home now that mortgage rates have started to decline. Some are making offers now, though others are sitting tight, betting that rates will fall further."

Despite these positive signals, many potential buyers remain hesitant. Redfin agents in markets like Seattle and Nashville haven’t observed increased demand. Many prospective buyers are waiting for the Federal Reserve to cut interest rates in September, although Redfin economists note that current mortgage rates likely already reflect the anticipated rate cut.

On the supply side, new listings increased 1.9% year over year, the largest rise in over two months. This suggests some sellers who had been holding off are now entering the market as rates decrease.

The housing market continues to show regional variations. Detroit, Pittsburgh, and Cleveland saw the largest year-over-year increases in median sale prices at 12.4%, 9.6%, and 8.2% respectively. Meanwhile, Dallas, Oakland, and Orlando experienced decreases of 3.4%, 2.7%, and 2.2%.

Pending sales grew most significantly in Pittsburgh (12.1%), Cleveland (9.4%), and Columbus (8.9%), while Houston, Seattle, and Miami saw the largest declines.

The median asking price nationwide stands at $398,975, up 3.3% from a year ago, while active listings have increased 12.1% year over year, the smallest rise since March 2024.

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