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Mortgage payments dropped and new home listings rose by the most since 2021, Redfin said.
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Falling mortgage rates have pushed payments down from their peak of $2,739 in October to $2,575.
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Redfin noted declining rates and a “sizable” increase in new listings is helping prospective buyers.
Relief may be coming for the frozen over housing market.
For one, it’s becoming a little bit cheaper to buy a home. Not only that, but there are finally more homes to choose from.
Tumbling mortgage rates have pushed payments down from their peak last month, and new home listings saw their biggest year-over-year increase in November since summer 2021, according to a Redfin report released Thursday.
“Mortgage rates are dropping due to easing inflation and investors betting the Fed will cut interest rates sooner than expected,” said Redfin economics research lead Chen Zhao, in the release. “Declining rates, along with a sizable year-over-year increase in new listings, are leading to more favorable conditions for some buyers.”
Mortgage payments have dropped for the fifth week in a row, from $2,739 in October to $2,575 in the first four weeks of November. New listings were up 6% — the biggest uptick in over two years — which points towards an easing supply crunch in the housing market.
And buyers are taking note. According to the release, mortgage-purchase applications are up 5% week over week.
The decline in mortgage payments stems from a decline in mortgage rates which have been stepping lower from their peak of 8% notched in October. As of Wednesday, the daily average for the 30-year mortgage rate was 7.13% — its lowest level since September.
But the market, which has been tight all year, still has a long way to go before conditions truly loosen. While the drop in mortgage payments lops off $164 from last month’s peak, it’s still a whole 13% higher than November last year. And the home prices were up by 4%, with the total number of homes for sale down 7% since last year.
“The confluence of high prices, high interest rates, and stubbornly low inventory are flash frying home buying now,” Jamie Cox, Managing Partner for Harris Financial Group, said on Tuesday. “If rates fall next year, housing will snap back.”
The uptick in listings is indeed a whiff of hope for the low supply in the market, and falling mortgage rates are a good sign for buyers.
“My advice for serious homebuyers is to compare housing costs to recent highs instead of long-ago lows,” Zhao said in the Redfin release. “Housing costs are at their lowest level in three months and it’s unlikely they will drop significantly anytime soon. That makes it a relatively good time to lock in a rate.”
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