The median U.S. monthly housing payment fell to $2,365 during the four weeks ending Jan. 4, down 4.7 percent from a year earlier and the lowest level since the start of 2024. That’s according to a report from Redfin.
Monthly payments fell largely because the weekly average mortgage rate recently dropped to 6.15 percent, the lowest level in over a year and down from roughly 7 percent at the beginning of 2025. Rates are declining because the labor market and overall economy are showing signs of weakness, according to Redfin.
Home prices are still rising, up 1.1 percent year-over-year, but price growth has decelerated from roughly 5 percent at this time last year.
Lower monthly payments haven’t yet brought many homebuyers or sellers back to the market, according to Redfin. Pending home sales are down 6.7 percent year-over-year, and new listings are down 8.3 percent. But Redfin economists say they wouldn’t expect a bump in sales or listings this early in the year.
“The housing market is in its holiday hangover season,” Chen Zhao, Redfin’s head of economic research, said in a release. “Prospective homebuyers are focused on getting back into work and school mode rather than hunting for houses — and in some parts of the country, snowy or wet weather is an obstacle. With mortgage rates and housing payments meaningfully lower than they were a year ago, we may see some buyers emerge in the coming weeks — and if buyers come, sellers are likely to follow.”
Redfin agents in some parts of the country say there are promising signs for the new year’s housing market.
“House hunting has ticked up,” Jo Chavez, a Redfin Premier agent in Kansas City, Mo., said. “My clients want to buy something now, while homes are sitting on the market longer than usual, and a fair amount of sellers are dropping their prices. They know that when the spring season starts, competition will pick up — especially if mortgage rates drop more.”