{"id":77241,"date":"2023-12-21T05:00:57","date_gmt":"2023-12-21T13:00:57","guid":{"rendered":"https:\/\/www.redfin.com\/news\/?p=77241"},"modified":"2023-12-20T15:18:15","modified_gmt":"2023-12-20T23:18:15","slug":"housing-market-update-declining-mortgage-rates-increase-new-listings","status":"publish","type":"post","link":"https:\/\/www.redfin.com\/news\/housing-market-update-declining-mortgage-rates-increase-new-listings\/","title":{"rendered":"Housing Market Update: Declining Mortgage Rates Lure Sellers Off Sidelines, Paving the Way For 2024 Buyers"},"content":{"rendered":"

Listing consults with Redfin agents have risen significantly since rates began to fall last month. Our economists expect buyers will take advantage of lower rates and more listings in the new year, after the typical holiday slowdown.\u00a0<\/span><\/i><\/p>\n

This week\u2019s falling mortgage rates, sizable year-over-year increases in both new listings and listing consults with\u00a0 Redfin agents, and <\/span>surge<\/span><\/a> in housing starts all suggest that 2023\u2019s frozen housing market is thawing. Sales are likely to climb after the typical holiday lull.\u00a0<\/span><\/p>\n

Monthly mortgage payments are dropping. <\/b>Daily average mortgage rates dropped to 6.64% this week, their lowest level since May and down from\u00a0 a two-decade high of 8% in late October. The median U.S. monthly mortgage payment was $2,472 during the four weeks ending December 17, down $264 from the October peak but up 11% year over year. Rates declined quickly last week because the Fed <\/span>shifted its tone<\/span><\/a>, signaling more interest-rate cuts sooner than expected as the latest data points to a soft landing for the economy.\u00a0<\/span><\/p>\n

There are more homes to choose from.\u00a0 <\/b>Redfin has seen a double-digit annual increase this week in homeowners contacting its real estate agents for help selling their homes, and new listings are up 9% from a year ago\u2013the biggest annual increase since July 2021. The uptick is partly due to falling rates, with homeowners feeling less <\/span>locked in<\/span><\/a> by rates in the 3% to 4% range.\u00a0<\/span><\/p>\n

Mortgage applications are up from their low point, but home sales are still falling. <\/b>Mortgage-purchase applications are up 18% from their early-November low point. But that early-stage demand hasn\u2019t yet translated into homebuying contracts: Pending home sales are down 7% year over year, similar to declines we\u2019ve seen over the last few months, but it\u2019s worth noting that the holidays are typically a slow season for the housing market. \u201cThe last week of economic news and data makes it more likely than not that mortgage rates have peaked,\u201d said Redfin Economic Research Lead Chen Zhao. \u201cBuyers will return from the holidays with more homes to choose from, and they should still see rates in the mid-6% range. But because the Fed is erring on the <\/span>side of caution<\/span><\/a>, there\u2019s still a chance that rates could go back up.\u201d<\/span><\/p>\n

Anecdotally, dropping rates are piquing buyers\u2019 interest. <\/b>Although sales aren\u2019t yet improving, Redfin agents and mortgage brokers are reporting that buyers are starting to act on lower rates:<\/span><\/p>\n