Inventory Up, Mortgage Costs Down in November

Affordability challenges continue to vex potential buyers.

But after months of watching the cost of a new mortgage rise higher and higher, home buyers finally saw some relief in November.

A combination of declining home values and lower mortgage rates (a significant 4.8% in November alone) brought the monthly mortgage payment on a typical U.S. home down by about $100, according to the latest Zillow® Market Report.

Improvement, yes, but monthly mortgage costs have been rising for most of the past two years and are up a whopping $720, or 66.1%, over the past year.

Positively speaking, total inventory is up 7% year over year, by far the largest increase since at least the start of 2018, according to the report.

Housing Market’s ‘Deep Freeze’ Could Thaw in January

Zillow senior economist Jeff Tucker said in prepared remarks that the housing market entered a deep freeze this November as buyers paused their purchasing plans, likely till after New Year’s in many cases.

“The two big questions are whether mortgage rates will continue to decline, and whether that will be enough to bring buyers back in time for the spring selling season,” Tucker said.

“In the meantime, those on the prowl for a house will benefit from motivated sellers, unusual bargains and a welcome lack of competition.”

Zillow reported that the largest declines from peak are in the most expensive markets — San Jose (-10.6%) and San Francisco (-9.5%).

Western markets that saw the largest pandemic-era appreciation: Austin (-10.4%), Phoenix (-8.1%) and Las Vegas (-8%).