Redfin Reports Housing Payments Drop to Lowest Level in 2 Years As Mortgage Rates Decline

Key Terms

30-year fixed mortgage rate financial

The 30-year fixed mortgage rate is the interest rate charged on a home loan that is paid back over 30 years with consistent monthly payments. Because the rate stays the same throughout the loan period, it provides stability and predictability for homeowners. This rate influences borrowing costs and can impact the overall housing market and consumer spending.

mortgage-purchase applications financial

Mortgage-purchase applications are requests submitted by consumers to lenders for home loans used to buy properties, as opposed to loans for refinancing existing mortgages. Investors watch the number and trend of these applications because they act like a real-time thermometer of housing demand and consumer confidence—rising applications suggest stronger home sales, construction activity, and related spending, while falling applications can signal cooling in the housing market and pressure on companies tied to mortgages and homebuilding.

seasonally adjusted technical

Seasonally adjusted means that figures have been modified to remove the effects of regular and predictable changes that happen at specific times of the year, such as holidays or weather patterns. This adjustment helps reveal the true underlying trend by making comparisons across different periods more accurate. For investors, it provides a clearer picture of whether economic activity is genuinely improving or declining, without the noise of seasonal fluctuations.

months of supply financial

Months of supply measures how long it would take to sell all available homes at the current sales rate. It is calculated by dividing the total number of homes for sale by the number of homes sold each month. A lower number suggests a faster market with high demand, while a higher number indicates a slower market with more choices for buyers.

sale-to-list price ratio financial

The sale-to-list price ratio measures how much of a property's asking price is actually paid by buyers, expressed as a percentage. For example, if a home is listed at $300,000 and sells for $285,000, the ratio is 95%. This figure helps investors gauge the strength of the market: a higher ratio suggests buyers are willing to pay close to asking prices, indicating high demand.

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Despite lower monthly mortgage payments, a holiday hangover is muting homebuying demand

SEATTLE--(BUSINESS WIRE)-- The median U.S. monthly housing payment fell to $2,365 during the four weeks ending January 4, down 4.7% from a year earlier and the lowest level since the start of 2024. That’s according to a new report from Redfin, the real estate brokerage powered by Rocket.

Monthly payments fell largely because the weekly average mortgage rate dropped to 6.15% last week, the lowest level in over a year and down from roughly 7% at the beginning of 2025. Rates are declining because the labor market and overall economy are showing signs of weakness. More clarity on how 2026 is shaping up will come with this Friday’s jobs report. Home prices are still rising, up 1.1% year over year, but price growth has decelerated from roughly 5% at this time last year.

Lower monthly payments haven’t yet brought many homebuyers or sellers back to the market. Pending home sales are down 6.7% year over year, and new listings are down 8.3%. 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,” 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. 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,” said Jo Chavez, a Redfin Premier agent in Kansas City, MO. “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.”

For Redfin economists’ takes on the housing market, please visit Redfin’s “From Our Economists” page.

Leading indicators

Indicators of homebuying demand and activity
	Value (if applicable)	Recent change	Year-over-year change	Source
Daily average 30-year fixed mortgage rate	6.19% (Jan. 7)	Lowest level in 2 months	Down from 7.1%	Mortgage News Daily
Weekly average 30-year fixed mortgage rate	6.15% (week ending Dec. 31)	Lowest level in over a year	Down from 6.91%	Freddie Mac
Mortgage-purchase applications (seasonally adjusted)		Down 6% from 2 weeks earlier (as of week ending Jan. 2)	Up 10%	Mortgage Bankers Association
Redfin Homebuyer Demand Index (seasonally adjusted)		Down about 3% from a month earlier (as of week ending Jan. 4)	Down 17%	A measure of tours and other homebuying services from Redfin agents
Google searches of “homes for sale”		Up 30% from a month earlier (as of Jan. 4)	Up 19%	Google Trends

Key housing-market data

U.S. highlights: Four weeks ending Jan. 4, 2025 Redfin’s national metrics include data from 400+ U.S. metro areas and are based on homes listed and/or sold during the period. Weekly housing-market data goes back through 2015. Subject to revision.
	Four weeks ending Jan. 4, 2025	Year-over-year change	Notes
Median sale price	$382,370	1.1%
Median asking price	$373,500	1.5%
Median monthly mortgage payment	$2,365 at a 6.15% mortgage rate	-4.7%	Lowest level in 2 years
Pending sales	49,283	-6.7%
New listings	42,136	-8.3%
Active listings	1,017,063	2.3%	Smallest increase in over 2 years
Months of supply	4.8	+0.3 pts.	4 to 5 months of supply is considered balanced, with a lower number indicating seller’s market conditions
Share of homes off market in two weeks	20.4%	Down from 22%
Median days on market	58	+7 days
Share of homes sold above list price	20.3%	Down from 23%
Average sale-to-list price ratio	98%	Down from 98.5%

Metro-level highlights: Four weeks ending Jan. 4, 2025 Redfin’s metro-level data includes the 50 most populous U.S. metros. Select metros may be excluded from time to time to ensure data accuracy.
	Metros with biggest year-over-year increases	Metros with biggest year-over-year decreases	Notes
Median sale price	Detroit (10.7%) Cincinnati (8.2%) Chicago (5.9%) Montgomery County, PA (5.6%) Newark, NJ (5.6%)	Dallas (-6.5%) Oakland, CA (-4.5%) San Jose, CA (-4.3%) Jacksonville, FL (-2.6%) Sacramento, CA (-2.2%)	Declined in 19 metros
Pending sales	West Palm Beach, FL (8.6%) Anaheim, CA (5.7%) Riverside, CA (4.7%) Virginia Beach, VA (2.7%) Phoenix (2.2%)	San Jose, CA (-37%) Warren, MI (-24.1%) Minneapolis (-22.8%) Oakland, CA (-19.4%) Houston (-19%)	Increased in 9 metros
New listings	Pittsburgh (4.4%) Baltimore (4.2%) Phoenix (3.3%) Cleveland (0.6%)	Jacksonville, FL (-23.4%) Tampa, FL (-21.9%) Oakland, CA (-21.6%) Dallas (-20.7%) San Antonio (-20.1%)	Increased in 4 metros

To view the full report, including charts, please visit:
https://www.redfin.com/news/housing-market-update-housing-payments-lowest-level-2-years

About Redfin

Redfin is a technology-driven real estate company with the country's most-visited real estate brokerage website. As part of Rocket Companies (NYSE: RKT), Redfin is creating an integrated homeownership platform from search to close to make the dream of homeownership more affordable and accessible for everyone. Redfin’s clients can see homes first with on-demand tours, easily apply for a home loan with Rocket Mortgage, and save thousands in fees while working with a top local agent.

You can find more information about Redfin and get the latest housing market data and research at https://www.redfin.com/news. For more information about Rocket Companies, visit https://www.rocketcompanies.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20260108121952/en/

Contact Redfin Journalist Services:
Tana Kelley
press@redfin.com

Source: Redfin