Home prices in the country showed a significant increase in the month but lower mortgage rates are bringing more buyers to the market, according to a new report. Redfin reports.
Average home sales in the four weeks ended January 15 rose 0.9% from 2022 to $350,250. The jump comes as more buyers are conducting home searches and mortgage applications are growing.
Many buyers entered the market in the last four weeks as mortgage rates fell, falling to 6.15% in the week ending January 19, marking the lowest level since September.
According to Redfin’s chief economist, Taylor Marr, those who started looking at homes online and scheduled inspections late last year are now home buyers.
“Lower competition, lower mortgage rates and foreclosures are bringing more buyers back into the market,” Marr said. “That will help maintain the value of the country’s houses, which is one of the bright spots for buyers. But many buyers are still sitting on the fence and demand may decrease if inflation declines more slowly than expected or mortgage rates rise again.
Year over year, however, home prices fell in 18 of the country’s 50 most popular, in the four weeks ending January 15, the report found.
Prices fell annually 10.1% in San Francisco, 6.7% in San Jose, 5.5% in Austin, 4.3% in Detroit, 3.8% in Seattle, 3.7% in Phoenix, 3.4% in Sacramento, 3.1% in San Diego, 2.8% in Anaheim, California, 2.5% in Chicago, 2.4% in Los Angeles, 2.3% in Oakland, California and 2.2% in Boston.
In Riverside, California, Portland, Oregon, New York, Newark, New Jersey, and Las Vegas, home prices fell by less than 2%.
Thirty-year mortgages fell to 6.15% for the week ending January 19. The daily average, according to the report, was 6.04% on January 18. Meanwhile, mortgage applications rose 25 % on January 13 from the previous week and purchase requests were down 26% from 2022.
With the low rate, the average monthly mortgage payment on a low-cost home was $2,262, unchanged from the previous week but down $245 from October’s high. Year after year, the monthly mortgage payment is 30%.
In the four weeks ended January 15, it rose 21.8% over 21.8% from a year ago, marking the largest annual increase. since 2015. Meanwhile, new listings fell 20% from last year, the biggest drop on record.