Two years ago, buyers would have cried about a 6% mortgage rate, according to one agent in Las Vegas.
“Now, they’re happy they’ve dropped down,” O’Shay Stein said to Redfin in prepared comments.
That drop means the average cost to buy a home as of the last day in 2023 is down nearly $400 from October’s high, putting the median mortgage payment at $2,361, according to a new report from the real estate brokerage.
It is at its lowest level in nearly a year after falling by $372 from October. Mortgage News Daily put rates at 6.76% as of Jan. 4.
“There have been more tours and more offers on my listings since mortgage rates started declining,” Stein said. “It’s all about perspective.”
Michael Romer, Co-Founder and Managing Partner, Romer Debbas, tells GlobeSt.com that the housing market is a consumer confidence game which is heavily based on timing.
“Simply put, no one wants to be the buyer who overpays when it comes to home prices or mortgage interest rates,” Romer said. “What we are starting to see is an uptick in consumer confidence and it’s all about interest rates.”
He said that between March 2022 and July 2023, there were a total of 11 interest rate hikes by the Fed and no market can withstand that without consequences.
“The housing market desperately craves interest rate stability and an overall understanding of what the new normal is,” he said. “However, with additional rate cuts expected in 2024, rate stability is still a concern for many.”
Bill Murray, Managing Director of Compass Atlanta, tells GlobeSt.com that there is a high demand for buying homes across the country, especially in Atlanta.
“The current activity in the market has increased and is expected to continue due to the pent-up demand from buyers,” Murray said.
“As interest rates continue to decrease, we anticipate more people to show interest in buying homes. These changes are indicative of the market going into the recovery phase.”