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51 November 2024 J O U R N A L November 2024 » builders," Kushi noted. "While builders are growing more confident in their abili- ty to sell newly built homes, they continue to face supply-side hurdles to building them, from higher construction costs to ongoing skilled labor shortages. Lower interest rates may help stimulate progress, but momentum will likely be constrained by these persistent challenges." PENDING SALES DIP AS BUYERS PLAY THE WAITING GAME A recent Redfin report revealed that existing-home sales fell roughly 1% month over-month in September and an estimated 3.1% year over year in August—to a season- ally adjusted annual rate of 4,042,369. That's the lowest level in records dating back to 2012, except for May 2020, when the pandemic brought the housing market to a standstill. Pending sales—a more current gauge of housing market activity that includes both existing and newly con- structed homes—fell to the lowest level on record aside from April 2020. They were down 1.9% month over month in August on a seasonally adjusted basis and dropped 2.4% year over year. Except for April 2020, pending sales—a more recent indicator of hous- ing market activity that considers both newly built and existing homes—fell to the lowest point ever recorded. Sea- sonally adjusted, they decreased 1.9% month over month and 2.4% year over year in August. Since the spring, mortgage rates have been falling, and they reached their lowest point in more than a year in August. The cost of housing payments has decreased from a year ago. However, consumers have been hesitant to reply. That may be partly due to the continued high cost of real estate. In August, the August median sale price increased by 3% year over year to $433,101. Even though that was the least amount of a rise in nearly a year, prices were still just 2.1% below their all-time high of $442,344 in June. Buyers must provide greater down payments due to rising housing costs. Agents Weigh in on Rates, How Buyers Remain Selective According to Redfin agents, some prospective house hunters are delaying their purchase in the hopes that interest rates will drop even more, while others are holding off because they don't understand the new National Associ- ation of Realtors (NAR) regulations or are waiting to see how the presidential election plays out. Some prospective homebuyers, ac- cording to Sacramento, California-based Redfin Premier real estate agent Mi- chael Cendejas, may not be aware that mortgage rates are falling. He claimed that although many people had heard that rates would drop in September, they hadn't been keeping an eye out for drops in rates prior to that month. September has brought renewed in- terest from buyers, according to Cende- jas, but many are still waiting for rates in the 5% level before making an offer. "There's no sense of urgency. Buyers are selective right now, especially if they have a house already. They're looking for the perfect home at the right price," Cendejas said. "There aren't a lot of desirable homes out there right now, and the ones that are in good shape go quickly if they're priced well. My advice to sellers is to price your home fairly; if you don't, it could end up sitting on the market." For the first time in three years, the average interest rate on a 30-year mortgage decreased to 6.5% in August from 7.07% the previous year. The rate decrease from one month prior was 0.35 percentage points, marking the biggest monthly decline since the end of 2023. Although they have since decreased even more, they have nevertheless risen above the pandemic's all-time low. The Federal Reserve is anticipated to lower interest rates by 25 to 50 basis points continuing until 2025, marking the first-rate reduction in four years. Mortgage rates might decrease in re- sponse, but it's uncertain by how much Pending sales—a more current gauge of housing market activity that includes both existing and newly constructed homes—fell to the lowest level on record aside from April 2020.