• Pending U.S. home sales jumped 7.7% year over year, the highest level since September 2022, according to Redfin.
  • Lower mortgage rates, which briefly dipped below 6.3%, and increased inventory are drawing buyers back into the market.
  • Despite the uptick, the market remains less competitive than past spring seasons, with homes taking longer to sell and fewer properties going above asking price.

Buyers Return as Rates Drop

Pending home sales in the U.S. rose to their highest mark in over two years, Redfin reported, as a combination of lower mortgage rates and more homes on the market lured buyers off the sidelines. The 7.7% year-over-year gain represents the strongest pace since September 2022, signaling a renewed appetite after a prolonged slump.

“The rate relief we saw in recent weeks has been a game-changer for many would-be buyers,” said a Redfin economist. “But they’re still cautious—they want updated, fairly priced homes, not just anything that comes on the market.”

Mortgage rates, which had climbed above 7% earlier this year, briefly fell below 6.3% in late May, according to Freddie Mac data. That drop trimmed monthly payments and helped push pending contracts higher. The National Association of Realtors also reported a 2.1% monthly increase in pending sales for May, though it noted regional disparities.

Less Frenzy, More Negotiation

Even with the jump in activity, the market lacks the feverish pace of typical spring seasons. The average time on market has stretched to 32 days, up from 26 days a year ago. Only about 35% of homes sold above asking price, compared with over 50% during the pandemic-era boom.

“Buyers are still price-sensitive,” said a Redfin agent in Phoenix. “Overpriced or outdated listings sit for weeks, while those that are move-in ready and priced right get multiple offers—but nothing like the bidding wars we saw before.”

Inventory has improved, with active listings up 15% from a year ago, giving buyers more choices. However, supply remains below pre-pandemic levels, and affordability pressures linger. The median monthly mortgage payment dipped slightly to $2,800, but that’s still nearly 40% higher than in early 2022.

Outlook: Gradual Recovery

Economists expect the market to continue its slow rebound if rates stay near current levels. The Federal Reserve’s next moves on interest rates will be crucial; any renewed tightening could freeze demand again. For now, “the vibe is cautiously optimistic,” said a housing analyst. “We’re seeing the bottom in sales, but it’s not a boom.”

Redfin’s data also showed that homes priced competitively and in good condition are selling fastest, with some markets—like Boston and San Diego—seeing stronger demand than others. Sellers who adjust expectations are finding willing buyers.

  • Correction: An earlier version of this article misstated the year-over-year gain as 6.2%. It is 7.7%. We regret the error.