Home sales rose slightly in September as mortgage rates declined.

Corrections & Clarifications: An earlier version of this story misattributed quotes from Bill Banfield, Rocket's chief business officer.

As rates for home loans hit their lowest level in over a year, housing market activity is responding. But upside from here may be limited unless rates take another big dip lower.

The average national rate for 30-year fixed-rate mortgages was 6.19% in the most recent week, Freddie Mac said on Oct. 23. That’s the fourth weekly decline in a row, and the lowest level for the most popular mortgage product since early October of 2024.

Lower rates are helpful for would-be buyers. An analysis from Redfin shows that the typical U.S. monthly payment is $2,556, barely any higher than it was a year ago. Compared to one month ago, when rates hovered around 6.4%, buyers have gained $9,500 in purchasing power, the brokerage reckons.

Buyers are jumping on the opportunity. Sales of previously-owned homes were 1.5% higher in September than August, the National Association of Realtors said Thursday, Oct. 23. Data on sales of newly-constructed homes is compiled by the Census Bureau, and remains on hold during the government shutdown.

For customers borrowing conventional 30-year fixed-rate mortgages, over 60% of the current locks are below 6%, said Bill Emerson, president of Rocket Companies – although in many cases those borrowers need to use points or other methods to get the rate that low.

"This is the way consumers are responding," Emerson told USA TODAY. "They are willing to buy the interest rate down."

The bigger question, however, is about what will induce more homeowners to become sellers.

Last September, mortgage rates fell as low as 6.08%, but bottomed there and then began marching steadily higher, Emerson pointed out. Now, "we do see some extra activity on the margins," he said, but "I think sellers may want to wait to see rates lower and steadier."

Michael Micheletti, chief marketing officer at fintech company Unlock, agrees.

Rates in the mid-5% range will "get the fringe out," he said, "but the everyday American homeowner is going to wait it out if they can."

Unlock is best known for structuring home equity agreements that allow owners to tap what they’ve accrued in exchange for cash. Consumers who call the company with questions or to start the process are often struggling, Micheletti said.

"Most homeowners are still believe that the macro conditions are suggesting some kind of recession ahead," he said. Between health care, childcare costs, groceries, transportation and more, "the stress is real for American families at this point."

This article originally appeared on USA TODAY: Mortgage rates are the lowest in over a year. Will the housing market respond?

Reporting by Andrea Riquier, USA TODAY / USA TODAY

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