Potential home buyers are sitting on the sidelines in anticipation of the Federal Reserve’s rate cut Wednesday.

Existing home sales fell 1% in August compared with a month earlier and were down 3.1% compared with a year ago, dropping to their lowest level since the pandemic began in March 2020. 

What You Need To Know

  • Potential home buyers are sitting on the sidelines in anticipation of the Federal Reserve’s rate cut Wednesday

  • Existing home sales fell 1% in August compared with a month earlier and were down 3.1% compared with a year ago, dropping to their lowest level since the pandemic began in March 2020, according to the real estate website Redfin

  • While mortgage rates have dropped to their lowest level in more than a year, home prices remain on an upward trajectory, keeping homes out of reach for many potential buyers

  • The current rate on a 30-year fixed mortgage is 6.11%; the median sale price of a home nationally is now $433,101 — 3% more than a year ago

“There’s no sense of urgency,” Redfin Premiere real estate agent Michael Cendejas said in a statement. “Buyers are selective right now, especially if they have a house already. They’re looking for the perfect home at the right price.”

While mortgage rates have dropped to their lowest level in more than a year, home prices remain on an upward trajectory, keeping homes out of reach for many potential buyers. When home prices are high, buyers need to come up with larger down payments.

The current rate on a 30-year fixed mortgage is 6.11%. The median sale price of a home nationally is now $433,101 — 3% more than a year ago.

Redfin said many of its agents report home buyers are waiting in the hopes that mortgage rates will fall following the Fed’s rate cut decision. Its researchers noted, “Mortgage rates may fall in response, but it’s unclear by how much because markets have already priced in a fairly fast pace of rate cuts.”

They said some buyers are also waiting to buy based on who wins the presidential election in November.