The median U.S. housing payment has dropped to nearly $250 below its springtime peak as mortgage rates decline. While Redfin agents are reporting a modest uptick in touring, pending home sales fell 5% year over year.

(NASDAQ: RDFN) — The typical buyer’s housing payment was $2,588 during the four weeks ending August 11, nearly $250 below April’s all-time high and up just 1% year over year–the smallest increase in five years. That’s according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.

There are also a few other encouraging signs for today’s buyers: The total number of homes for sale is up nearly 20% year over year, and a growing share of inventory is growing stale, allowing some buyers the chance to negotiate. Additionally, less than 30% of homes are selling above list price, down from 35% a year ago.

Despite declining costs and improving inventory, pending home sales have yet to improve: Pending sales are down 5.1% year over year, the biggest decline since November (except the prior 4-week period, when there was a 6.2% decline). There are several reasons buyers aren’t jumping at the chance to take advantage of falling mortgage rates. Although home prices have come down from their July peak, they’re still near record highs. Additionally, some prospective buyers are sitting on the sidelines because of economic and political uncertainty around the presidential election, whether mortgage rates will fall more and whether the U.S. is going to enter an official recession.

There are a few signs that more house hunters are starting the homebuying process. Mortgage-purchase applications are up 3% week over week on a seasonally adjusted basis. And Redfin’s Homebuyer Demand Index–a measure of requests for tours and other buying services from Redfin agents–is down 10% year over year, but that’s the smallest decline since April.

“I was hoping more buyers would emerge when mortgage rates started declining. And while house hunting has picked up a bit, the increase isn’t all that significant,” said Brynn Rea, a Redfin Premier agent in Spokane, WA. “Budgets are typically the most important factor for buyers, and homes are still really expensive for a lot of people. A lot of buyers are waiting to see if mortgage rates fall more if and when the Fed cuts interest rates, and to see what happens with the economy and the election later in the year.”

This week’s CPI report shows that inflation continues to soften, reinforcing the expectation the Fed will start cutting interest rates in September, though it’s unclear by how much. Markets have priced in expectations of aggressive rate cuts. If the Fed doesn’t match those expectations, rates could rise a bit, but if they cut as quickly as markets are hoping–or even faster–mortgage rates have more room to fall. And if falling rates drive up demand, that could push up home prices.

For more on Redfin economists’ takes on the housing market, please visit Redfin’s “From Our Economists” page.

Key housing-market data

To view the full report, including charts, please visit: https://www.redfin.com/news/housing-market-update-housing-payments-pending-sales-decline

About Redfin

Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, title insurance, and renovations services. We run the country's #1 real estate brokerage site. Our customers can save thousands in fees while working with a top agent. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home can have our renovations crew fix it up to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we've saved customers more than $1.6 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 4,000 people.

Redfin’s subsidiaries and affiliated brands include: Bay Equity Home Loans®, Rent.™, Apartment Guide®, Title Forward® and WalkScore®.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email press@redfin.com. To view Redfin's press center, click here.

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