This time last year, home financing costs in the US bottomed around 6.15%. Over the ensuing three and a half months, they rose nearly a full percentage point.

That short trip down memory lane’s cautionary tale, and it underscores the urgency of the quandary posed by a recent headline from Redfin’s news section: “Homebuyers Must Decide: Buy Now With Little Competition, Or Bet on Rates Falling More?”

Cue the knight from Indiana Jones and the Last Crusade: “You must choose. But choose wisely!”

That’s the context for a fourth consecutive weekly decline on the MBA’s 30-year fixed gauge. At 6.34%, rates are now the lowest in a year.

Rates are now down almost 70bps from the local highs seen in late May.

That’s meaningful relief to be sure, but for whom? I keep asking different versions of that same question in 2025.

It’s my suspicion that most buyers who could afford homes at record prices with mortgage rates anywhere near the pre-GFC average already bought. That, I think, helps explain why you’ve seen a lot more in the way of a pickup in refis than purchase apps alongside the recent decline in rates.

The figure above indexes the MBA’s purchase activity and refi gauges to mid-May (i.e., when rates were knocking on the door of a seven-handle again) and overlays the 30-year fixed. The rate relief’s enough to spark a wave of refinancings, but not enough to juice sales.

“Refinance volume increased further last week and is now 80% higher than four weeks ago, accounting for more than 60% of all application activity,” MBA SVP Mike Fratantoni said Wednesday. “While homebuyer demand typically tends to decrease during the fall, purchase application activity remains relatively strong right now, running 18% ahead of last year’s pace.”

That’s not saying much, I’m afraid. The purchase index was loitering near a three-decade low this time last year.

In a testament to the notion that buyers are scarce, sellers outnumbered them by more than 35% in August, Redfin said this week.

There’s the chart and it’s a doozy. Sellers have outnumbered buyers by ~half a million for five months in a row.

“This summer was the strongest buyer’s market on record,” Redfin’s Lily Katz wrote, in the linked article. She added an important caveat: “Of course, it’s only a buyer’s market for those who can afford to buy.”

Yes, “of course.”