Prices are falling from a year ago in four Texas metros–Austin, San Antonio, Houston and Fort Worth–and in Portland, OR. Redfin predicts price declines will become more widespread in the new year.
Homebuying is becoming more affordable as mortgage rates continue declining. The median U.S. housing payment was $2,561 during the four weeks ending December 3, down $177 from the record high it hit in October. That’s spurring action from sidelined homebuyers and sellers.
Mortgage-purchase applications are up 15% from the 28-year low they dropped to at the start of November. New listings are up 7% year over year, the biggest increase since August 2021, and the number of homeowners contacting Redfin for help selling their home is up by double digits from a year ago.
Mortgage rates are coming down because economic events are tilting in the housing market’s favor. This week, a softer-than-expected report on job openings is another piece of evidence on a growing pile that the Fed may cut interest rates sooner than anticipated. The daily average 30-year fixed rate was 7.04% on December 6, down from 8% six weeks earlier and its lowest level since the start of August.
“With the hope of a few more homes coming on the market, buyers who can afford 7% mortgage rates or pay in cash have some bargaining power,” said Phoenix Redfin Premier Van Welborn. “People are taking their time looking at multiple homes, and they’re able to back out if the inspection uncovers problems because they can wait for something better to come on the market. But there isn’t much wiggle room on price: I’m advising buyers to be reasonable with their offers because home values are still relatively high and sellers don’t want to let go of their home for less than what they feel it’s worth.”
Home prices are falling from a year ago in five of the 50 most populous U.S. metros. Redfin predicts prices will start declining in more metros in 2024, though they still have room to grow in inexpensive parts of the country.
Refer to our metrics definition page for explanations of all the metrics used in this report.
