Driven by falling mortgage rates, the median U.S. monthly housing payment has dropped to its lowest level in two years. That's based on the figure falling to $2,365 for the week ending January 4. That represents a 4.7% decline from a year earlier and the lowest payment level since early 2024, according to a Redfin analysis.
That comes as mortgage rates eased in early January, with the weekly average dropping to 6.15%, the lowest in over a year and down from roughly 7% at the start of 2025. Economists say rates are declining as the labor market and broader economy show signs of slowing.
Home prices, however, continue to climb, rising 1.1% year-over-year, though price growth has slowed from roughly 5% at this time last year. Lower monthly payments have not yet translated into a surge of buying or selling activity. Pending home sales fell 6.7% year-over-year, and new listings plunged 8.3%, a trend Redfin economists say is typical for the first part of a new year.
“The housing market is in its holiday hangover season,” said Chen Zhao, Redfin’s head of economic research.
“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.”
Still, Zhao noted that meaningfully lower mortgage rates and housing payments could prompt some buyers to enter the market in the coming weeks, which would likely spur sellers to follow. Supporting this, Google searches for homes for sale are up 30% from a month ago.
As of January 4, the median sale price stood at $382,370, up 1.1% year-over-year, while there were just over a million active listings, marking the smallest annual increase (2.3%) in more than two years. Among the 50 metros Redfin studied, Detroit, Cincinnati and Chicago saw the largest year-over-year gains in median sale prices, while Dallas, Oakland and San Jose experienced the largest declines. Overall, sale prices fell in 19 of the 50 metros.
Redfin data shows a national supply of 4.8 months, suggesting a balanced market with a slight tilt toward buyers. Meanwhile, the median days on market rose seven days to 58, reflecting slower early-year activity.
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