Housing Research Brief: August 2024

Lower Mortgage Rates Nudge Up Buyer Demand While Potential Sellers Sit Tight

Modest borrowing cost relief inches up home sales. The average 30-year fixed-rate mortgage decreased from a 2024 peak of 7.1 percent in May to the mid-6 percent range by late August. That downshift brought some buyers off the sidelines in July, with existing home sales rising by 1.4 percent month-over-month. Still, the uptick in purchases was mild as sales velocity remained down by about 1.6 percent compared with the trailing-year average. As many homeowners have mortgages locked in well below the current market rate, the modest relief is having little impact on motivating sell-side activity. The number of existing homes for sale fell to an eight-month low in July, and that market tightness escalated prices. Nationwide, the median cost of an existing house rose by 4.2 percent year-over-year to an all-time high of $412,400, maintaining steep affordability constraints.

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