As mortgage rates fall to a four-month low, more buyers are returning to the market, according to a new Redfin report. Despite the increased demand and more sellers dropping prices, home sales have yet to reap the benefits of the market changes. 

In July pending sales had the largest decline since May of 2020, according to the report, which also found home sellers reluctant to put their homes on the market. Last month, new listings fell 11% from the previous year, the largest decline since June of 2020.

Redfin deputy chief economist Taylor Marr said homebuyers may catch a break this month as rates have come down nearly a point from the recent high on fears of a recession.

”There are deals to be had on some homes that have been sitting on the market with reduced prices,” Marr said. “General economic uncertainty may continue to keep a lid on homebuyer demand and keep mortgage rates volatile, but the labor market remains a beacon of strength in the economy and the housing market in particular.”

Redfin found fewer Google searches for “homes for sale” during the week ended July 30, down 24% from last year, but up 9% from May. Its Homebuyer Demand Index, which measures requests for tours and other services, fell 9% year over year during the week ended July 31 but was up 21 points since the week of June 19. 

Additionally, mortgage applications fell 16% from last year as the 30-year mortgage rate fell to 4.99% for the week ended Aug. 4, the lowest it’s been in four months, down from 2022’s high of 5.81% but up from 3.11% at the beginning of the year. 

In the four weeks ended July 31, active listings rose 4% year over year. The median asking price rose 13% from 2021 to $394,375, down 2.6% from May’s all-time high. Meanwhile, the median sale price increased 8% year over year to $380,187, the slowest prices have grown since July of 2020, according to the report. Despite that growth, asking prices fell last month, down 3.8% from their June 19 peak. 

New listings were down 1.7% from last year, while active listings rose 4% year over year.

Thirty-eight percent of homes that went under contract had an offer within the first two weeks, down from 45% last year, and 45% of homes sold above list price, down from 53% last year. 

The report also noted the monthly mortgage payment on a median asking-price home was $2,267 at the current 4.99% mortgage rate. That was up 37% from last year’s $1,655 when mortgage rates were 2.77%, down from the June 12 peak of $2,467.