Monthly home payments fall 14 percent, hit lowest level in almost a year: Report

The media U.S. mortgage payment was down nearly $400 in December from its October peak, enticing some homebuyers back into the market, according to a Thursday report from real estate group Redfin.

The median mortgage payment was $2,361 for the four-week period ending Dec. 31, Redfin found. That’s $372, or 13.6 percent, less than it was in October and the lowest average monthly payment in nearly a year.

The weekly average mortgage rate, which hit a 23-year high of 7.79 percent in October, also fell to 6.61 percent at the end of December after the Federal Reserve signaled interest rate cuts ahead in 2024.

“There have been more tours and more offers on my listings since mortgage rates started declining,” said Las Vegas Redfin Premier agent Shay Stein. “It’s all about perspective: Two years ago, buyers would have cried about a 6% mortgage rate. Now, they’re happy they’ve dropped down to the mid-6’s.”

Falling mortgage prices and rates are a welcome sign after housing affordability fell to a record low in 2023.

Just 15.5 percent of homes for sale in 2023 were affordable for a typical American household, a separate December analysis by Redfin found. But the real estate group expects conditions to improve as rates fall and the housing supply increases.