The median U.S. monthly housing payment dipped to $2,413 during the four weeks ending Jan. 11, near the lowest level in two years and down 5.5 percent from a year earlier. That’s the biggest decline since October 2024, according to a report from Redfin.
Housing payments are coming down because mortgage rates are falling. The daily average mortgage rate dropped to 5.99 percent last week, its lowest level in nearly three years, after President Trump ordered federal agencies to buy $200 billion in mortgage bonds (the daily average rate has since ticked up to 6.07 percent). One impact of declining mortgage rates is that homebuyers’ purchasing power has increased by roughly $14,000 in the last month and $30,000 in the last six months.
Monthly housing payments would be falling more if not for still-rising sale prices, according to Redfin. The median home-sale price is up 1 percent year-over-year, though it’s worth noting that’s small compared to the 4 percent to 5 percent increases at the start of 2025.
Despite lower housing costs, fewer people are buying and selling homes. Pending home sales fell 5 percent year-over-year, and new listings declined 4.7 percent. There may be an improvement in pending sales soon; the recent rate decline from roughly 6.21 percent to 5.99 percent, could result in more homes going under contract in the coming weeks. Mortgage-purchase applications are up 16 percent week-over-week, though mortgage applications don’t always line up with home sales.
“Portland buyers typically hibernate in January, with the gloomy weather keeping them inside. But I think this year will be livelier,” Meme Loggins, a Redfin Premier agent in Portland, Ore., said in a release. “Right now, homes are sitting on the market for several months, and a lot of sellers are cutting their asking price. Buyers know that’s unlikely to last long, especially with rates coming down. Prospective buyers know competition will probably tick up by springtime, so they’re getting serious about house hunting and getting a deal while they can.”