A new Redfin report shows early indicators of an accelerated decline in buyer demand as mortgage rates jumped to a 15-year high last week. 

Though 30-year fixed mortgage rates dipped slightly to 6.66%, median home prices are still up from last year. In addition, monthly mortgage payments for median asking prices are almost 49% higher than a year ago—causing a significant decline in purchasing power.  


Pending home sales are down 25% compared to a year ago, the biggest drop since May 2020. 

Buyers are backing off in greater numbers

The typical indicators of buyer demand have dropped: 

  • Home tours. Featuring data from ShowingTime, home tours are down 7% compared to a year ago and down 26% from the start of the year. 
  • Google searches. “Homes for sale” searches are down 33% compared to this time last year. 
  • Purchase mortgage applications. Compared to a year ago, purchase mortgage applications are down 37%, reaching their lowest level since October 2015. 

In addition, Redfin’s Homebuyer Demand Index—a measure of buyer requests for home tours and various other home-buying services—dropped 6% last week and 10% over the past three weeks to its lowest level since the week ending June 19th. The index was down 26% compared to a year earlier. 

Buyers have lost 29% of their purchasing power

Homebuyers in the U.S. have lost 29% of their purchasing power. This is primarily due to the average 30-year-fixed mortgage rate climbing from 2.65% at the beginning of 2021 to rates over 6.5%


With higher rates come higher monthly mortgage payments, causing many buyers to put home purchases on hold. Some can no longer qualify for a mortgage loan in the amount they need, and others simply can’t afford the higher housing cost. 

Home prices are softening in some metros but remain elevated, for the most part, due to low housing supply. 

And while active listings are up 3% from a year ago—giving buyers more options to choose from—early indicators from last week show a decline in buyer demand. 

Mortgage rates well over 6% are spooking homebuyers. Sellers are pulling back in this market, but buyers are pulling back even more. Home prices are holding steady for now. It will take a few months before the prices of closed sales start to reflect this shock to the market. However, there is evidence of sizable price declines in parts of the market that aren’t accounted for by MLS data, such as home builders offloading homes in bulk at a 20% discount.

Taylor Marr

Redfin Deputy Chief Economist

Redfin’s housing market takeaways for 400+ U.S. metros

Redfin’s analysis yielded the following takeaways on the U.S. housing market for the four-month period ending October 2nd (unless otherwise noted). 

  • Median home sale price — $367,652, up 7% from a year ago
  • Median asking price of newly listed homes — $383,000, up 9% from a year ago
  • Monthly mortgage payment (on the median asking price) — $2,528 at the current 6.66% rate for a 30-year fixed mortgage, up 49% from the same time last year ($1,701)
  • Pending home sales — down 25% from a year ago, the biggest drop since May 2020 
  • New listings of homes — down 18% from a year ago
  • Active listings — down 1% from the prior four-week period and up 3% from a year ago. 
  • Months of supply (calculated by dividing the total number of active listings by the number of closed sales) — rose to 3.0 months, the highest level since July 2020.
  • Median days on market — 32 days, up a full week from a year ago (25 days) and up from the record low of 17 days set in May and early June of this year. 
  • Homes that sold above list price — 31%, down from 45% a year ago and the lowest share since February 2021. 
  • Homes with a price drop — 7.7%, on average — a record high and up from 3.9% a year ago 
  • Average sale-to-list price ratio — 99.1%, down from 100.7% a year earlier and falling to its lowest level since August 2020. 

Top takeaways for real estate agents

While the share of properties experiencing price drops has gone up, it’s worth noting that it’s still a small percentage of home sales. Help your clients understand what leads to those price drops and to see past the hype surrounding the higher mortgage rates. 

Better yet, collect data to show your clients and community the bigger picture surrounding today’s mortgage rates, housing supply, and home prices. 

Stay on top of the latest developments in the housing market, especially as it impacts your neighborhood. Show potential buyers and homeowners in your community what they can do to make the most of the advantages this market offers.