04:20 PM EDT, 08/26/2024 (MT Newswires) -- Starter home pending sales climbed to the highest level since October 2022 last month while mid- and upper-priced homes notched monthly declines, Redfin (RDFN) said Monday.

Pending sales of starter homes rose about 10% in July, while middle-price homes, which include prices in the 35th to 65th percentile of the market, fell 6.5%. Upper-price-home pending sales dropped 10% while luxury sales slid 7.9%, according to the real estate brokerage's report.

"The overall market remains sluggish, but we are beginning to see first-time homebuyers come off the sidelines, buoyed by falling mortgage rates and an increased number of homes hitting the market," said Redfin Senior Economist Sheharyar Bokhari.

The data also reflects buyers that have been forced to consider less-expensive options due to near-record home prices, Bokhari said.

The price of a typical starter home rose 4.2% year over year to a record $250,000 but underperformed the mid- and upper-tiers, which were up 4.6% and 5%, respectively, according to Redfin. Higher levels of inventory at the lower-end of the market have helped cap starter home prices from surging further.

Inventory and new listings for starter homes were up nearly 19% each from the same period of 2023, with inventory reaching the highest level since October 2022, the real estate company's data showed. In the middle and upper tiers, inventory was up 4.1% and 1.6%, respectively.

"More buyers means more sales, but so far we aren't seeing prices skyrocket, because the rising number of homes hitting the market is enough to satisfy the increased demand -- a positive outcome for both buyers and sellers," Bokhari said.

Major metros in Texas and Florida saw some of the biggest annual price declines in July due to gains in inventory.

Price: 11.76, Change: +0.68, Percent Change: +6.09