US home sales are plunging — but could a ‘magic’ number on mortgage rates finally unlock buyer opportunities?

Core Insights - The report from Redfin indicates a significant decline in active U.S. home listings, marking the largest drop since 2023, with listings down 1.4% from July and nearly 3% year-over-year [1][2] - Concerns over housing costs and the economy are affecting both buyers and sellers, with expectations that home sales in 2025 will match the low levels of 2024, which was the worst year for sales since 1995 [2] - The median home sale price increased by 1.7% year-over-year to $440,004, but falling mortgage rates could lead to a potential increase in sales if they continue to decline [2][4] Market Dynamics - The average mortgage rate has reached a year-long low of 6.26%, approaching the "magic number" of 6% that could stimulate buyer interest significantly [4] - The current mortgage rate of 6% is still considerably higher than the 2.96% rate seen in 2021, which was the lowest in over 50 years, but is lower than the historical average of nearly 8% since 1971 [5] - Factors such as slower price growth, increased inventory, and stronger negotiating power are shifting the market dynamics in favor of buyers [5]