Homeowners’ monthly mortgage payments dropped to lowest rate in years
Mortgage payments dropped to an average of $2,361 at the end of 2023. (iStock)
Saturday, Apr 27, 2024
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Mortgage payments dropped to an average of $2,361 at the end of 2023. (iStock)
Good news for homebuyers and homeowners alike: monthly mortgage payments have dropped to their lowest average rate in years, according to a recent Redfin report.
The average mortgage payment now sits at $2,361 as of December 31st, 2023. That’s a $327, or 14%, drop from the all-time high in October 2023. The current market thaw has buyers more interested in the housing market.
Redfin’s Homebuyer Demand Index is up 10% from last month and has reached its highest peak since August 2023, the Redfin release reports. With an inventory shortage, pending sales are still down 3% annually, but that’s the smallest decline in the last two years.
“There have been more tours and more offers on my listings since mortgage rates started declining,” said Shay Stein, Las Vegas Redfin Premier agent. “It’s all about perspective: Two years ago, buyers would have cried about a 6% mortgage rate. Now, they’re happy they’ve dropped down to the mid-6’s.”
If you’re thinking of buying a home this year, besides finding the house of your dreams, you also want to get the best interest rate possible to reduce your monthly payment. Credible can help you compare rates from different lenders in just minutes, without affecting your credit score.
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Buyers are becoming more optimistic as the new year brings lower buying prices. In a recent Fannie Mae survey, 17% of respondents said they thought it was a good time to buy a home, up from 14% in November.
Unfortunately, sellers aren’t as optimistic, considering interest rates haven’t dropped lower than pre-pandemic levels. 57% of homeowners said they felt it was the right time to sell, according to the Fannie Mae survey. That’s a decrease from 60% since the last survey was released.
Certain areas of the country will see higher sales, as there’s simply more demand for housing in those areas. “Job growth will be a determinant for long-term housing demand,” Lawrence Yun, NAR Chief Economist Lawrence said in a report.
The NAR looked at 100 of the largest metro areas in the U.S. in its report. Cities with the highest demand include, among others, the Austin, Texas area, the Dallas, Texas area, Nashville, Philadelphia and the Portland, Maine area.
Sales are likely to be higher in these places because the cost of housing has gone up, leaving a gold mine for potential sellers.
If you think you’re ready to shop around for a home loan, consider using Credible to help you easily compare interest rates from multiple lenders in minutes.
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Despite the positive outlook for the mortgage market, there are other financial struggles Americans are dealing with this year. The cost of living is still making it difficult for many families to make ends meet.
Six out of every 10 respondents to a recent Bread Financial survey believe they’ll spend more than their budget allows this year. Inflation is the culprit most of these respondents blame, with 47% stating their current financial struggles have to do with the effects of inflation.
For these families, 2024 isn’t likely to be much better. More than half of the survey respondents felt it would be more difficult to meet financial priorities — like buying a home or paying off debt — than it was in previous years. The cost of necessities going up was cited by 64% of Bread’s survey respondents, as the reason these goals would be difficult to meet.
Even with such a dreary outlook for many, certain generations are still prioritizing major purchases such as a home. Millennials are trying to catch up on their homeownership dreams, with a quarter of them already well on their way to saving for a home, according to a study. However, in response to high interest rates, 62% of millennials have put that goal to the side.
“Millennials are confident and optimistic on the whole, in spite of the economic challenges they have experienced. Even with today’s rising home prices they are not deterred, with 70% still believing it is possible for people their age to afford to purchase a home,” said Kimberly Bridges, director of financial planning at BOK Financial.
You can explore your mortgage options in minutes by visiting Credible to compare rates and lenders. Check out Credible and get prequalified today.
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