Monthly Home Payments Tumbled 7% from October to December

The typical monthly housing payment cost in December nationwide dropped 7% from the pandemic-era peak in October, according to a new report from real estate brokerage Redfin.

It fell in all markets tracked by Redfin with the biggest drops in West Coast tech hubs and some of the nation’s most affordable areas.

Falling mortgage rates and housing prices have inspired the decline in costs. Mortgage rates in December averaged 6.36%, down from 6.9% in October, but are still elevated from the 3.5% rate a year ago.

It has fallen four weeks in a row and sits at 6.09% this week, according to Freddie Mac. Rates have declined nearly a full point since mid-November, allowing as many as 3 million more buyers to qualify for a median-priced home, Freddie Mac said.

Monthly costs fell most in San Francisco (down 14.8%), followed by Pittsburgh (12.4%); Seattle (12.1%); Oakland (11.6%); Detroit (11.3%); and San Jose (10.6%).

San Jose Redfin agent Angela Langone said in prepared remarks that now that rates are down, a lot of Bay Area house hunters are starting to tour homes and make offers again.

“We’re in a sweet spot where prices and rates have dropped enough to make a meaningful difference in housing payments but there’s still less competition than there has been for the last few years.”