Prospective homebuyers are holding off on buying new homes as they bet on mortgage rates falling further, causing slow home sales, according to builders.

And why wouldn't they wait?

In the week ending Aug. 23, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $766,550 slipped from 6.5% to 6.44%. This marks the lowest level since April 2023 and the fourth consecutive week of rate declines, according to theMortgage Bankers Association(MBA).

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"As observed in recent weeks, despite lower rates, purchase applications...