Redfin Reports Bay Area Homebuyers Stand to Save Thousands on Monthly Payments Following Mortgage-Rate Decline
Mortgage rates have fallen to
Housing payments are falling due mostly to lower mortgage rates: In anticipation of the Fed’s historic interest-rate cut, which happened last week, the average 30-year mortgage rate fell to
Two other
This is according to a Redfin analysis of median monthly housing payments, which are calculated using average 30-year fixed mortgage rates and median sale prices, and assume a
The
Housing costs fell in 44 of the 47 metros included in Redfin’s analysis. They rose slightly in
Mortgage rates dropped in anticipation of Fed’s interest-rate cut
This is good news for homebuyers, who have been waiting years for a meaningful drop in housing payments. The cost of buying a home began rising in early 2022 as the Fed increased interest rates to battle inflation, which pushed up mortgage rates. That dampened demand, but it dampened supply even more, driving up home prices despite slow sales. Median monthly mortgage payments peaked in April, when home prices were approaching their all-time high and mortgage rates were sitting above
Now, housing payments have fallen substantially from their peak because mortgage rates are declining. Rates started falling over the summer in anticipation of the Fed cutting interest rates for the first time in four years; the Fed finally did cut rates aggressively last week. Home prices have also fallen from their peak—more significantly in some metros than others—but they have generally stayed high due to low inventory.
Redfin economists to house hunters: Mortgage rates are unlikely to drop much further, and prices may increase
Mortgage rates are unlikely to drop much further than they already have, as markets had already priced in the Fed’s rate cut prior to last week, and the upcoming Fed rate cuts may push mortgage rates down to around
“House hunters who have been waiting on the sidelines for costs to fall should seriously consider jumping into the market now,” said Chen Zhao, Redfin’s economic research lead. “We’re in a sweet spot for buyers. This may be close to the bottom for housing payments, especially in expensive and desirable coastal markets. Mortgage rates have fallen about as much as they’re going to fall, and we’re already seeing demand surge back. If supply doesn’t increase as much as demand, price growth is likely to rise.”
To view the full report, including a full methodology and a metro-level summary, please visit: https://www.redfin.com/news/falling-monthly-housing-payments-bay-area
About Redfin
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Redfin Journalist Services:
Kenneth Applewhaite
press@redfin.com
Source: Redfin