Monthly housing payments have fallen to their lowest level in four months, according to a report from Redfin.
The median payment dropped to $2,671 during the four weeks ending July 21, down $166 from the record high set in late April.
The decline comes as mortgage rates and inflation cool, with the average rate hitting 6.77% - the lowest since March. While the Federal Reserve held interest rates steady at its July 31 meeting, it confirmed a potential rate cut in September.
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Fed Chairman Jerome Powell told reporters that a reduction in the policy rate could be considered as soon as the next meeting in September.
Powell said that cuts in September would depend on inflation data not turning back up unexpectedly but set a low bar, saying it didn't necessarily need to improve.
The number of homes on the market also is increasing, with new listings up 6.1% year-over-year. More listings stay on the market longer, giving buyers more time to negotiate.
Despite improving market conditions, potential homebuyers remain cautious. While mortgage rates are decreasing, home prices are still hovering near record highs, deterring many from entering the market. The upcoming presidential election also is causing some buyers to delay their purchase decisions because of economic and political uncertainty.
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"I'm working with several buyers who are waiting for the election before they make a move," said Matthew Purdy, a Redfin Premier agent in Northern Colorado. "Some of them say they'll only buy a home if their candidate wins. Others are waiting because they feel the economy and housing market are shaky and hope it will improve after the election. I am working with a few foreign buyers who are wary about investing any more money in U.S. real estate before they see who takes office."
According to a report from the National Association of Realtors (NAR), International buyers account for 1.3% of all U.S. home sales annually. Nearly half of international buyer sales were all cash, compared with 28% of total existing home sales.
"The strong U.S. dollar makes international travel cheaper for Americans but makes U.S. homes much more expensive for foreigners," said Lawrence Yun, chief economist for NAR. "Therefore, it's not surprising to see a pullback in U.S. home sales from foreign buyers."
