Economists say a 4.7% annual decline in monthly payments hasn’t brought buyers or sellers back into the market much, but this may be largely due to seasonality.
The new year started with housing payments at their lowest level since early 2024.
The median monthly home payment in the U.S. fell to $2,365 in the four weeks ending Jan. 4, a 4.7% decrease from a year ago, Redfin reported Thursday.
Monthly payments fell largely because average weekly mortgage rates hit a one-year low of 6.15% last week, up from about 7% at the start of 2025.
Interest rates have been lowered due to the weakening labor market and economy. However, house prices have continued to rise slowly, currently rising by 1.1% compared to the previous year. At this time last year, house prices were up about 5% compared to the previous year.
Economists say buyers and sellers have not yet returned to the market significantly due to lower monthly payments, but this may be largely due to seasonality. The number of pending home sales is down 6.7% year-on-year, and the number of new listings is down 8.3% year-on-year.
Chen Zhao |Credit: Redfin
“The housing market is in the midst of a holiday hangover season,” Chen Zhao, head of economic research at Redfin, said in the company’s report. “Prospective homebuyers are more focused on getting back to work or school mode than looking for a home, and snow and wet weather is a hindrance in some parts of the country. With mortgage rates and home payments significantly lower than they were a year ago, buyers may emerge in the coming weeks. And as buyers come, sellers will likely follow.”
The Redfin Home Buyer Demand Index, which measures tours and other home buying services from Redfin agents, was down 3% month-over-month and 17% year-over-year. Meanwhile, the number of active listings increased by 2.3% year-on-year, the lowest annual growth rate in the past two years.
Economists and other industry analysts are awaiting this Friday’s employment report from the Bureau of Labor Statistics, which could provide further insight into the market outlook for 2026.
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