Redfin reports biggest drop in home payments in 4 years ahead of historic Fed rate cut that could lure buyers off the sidelines

(NASDAQ:RDFN) – The average housing payment in the U.S. was $2,534 in the four weeks ended Sept. 15, down 2.7% from a year earlier – the biggest drop since May 2020, according to a new report from technology-based real estate brokerage Redfin (redfin.com). Monthly payments are falling because mortgage rates have fallen to their lowest levels in 20 months ahead of the Fed's first rate cut since 2020.

The number of mortgage applications is increasing, but the number of pending sales still leaves much to be desired. Mortgage applications are up 5% week-over-week, with some buyers jumping off the waiting list amid falling mortgage rates. But many potential buyers are still holding off as pending home sales are down 6.9% year-over-year, one of the steepest declines since October 2023. And that's despite lower housing payments and more home choices: New listings are up 5.1% year-over-year, and the total number of homes for sale is up 16.1%.