Mortgage payments became slightly cheaper in November, lenders said Thursday amid weeks of declines in rates that have made monthly payments more affordable.
The national median mortgage payment dropped by nearly 3 percent for the month to about $2,140, $62 lower than October, according to the Mortgage Bankers Association. Despite the November decline, monthly home loans outlays were up more than 8 percent, an equivalent of $160.
Over the last few weeks, mortgage rates have been trending down after they hit their peak of 8 percent in October. For the week ending December 15, the 30-year fixed mortgage rate was a little over 6.8 percent while the 15-year rate dropped to 6.41 percent.
Housing Affordability Improves
The decline in rates has made securing a home loan slightly cheaper for prospective homebuyers, a trend that experts say could continue into the new year.
"Homebuyer affordability improved in November, with a decline in mortgage rates providing relief to prospective homebuyers," Edward Seiler, a housing economist at MBA and executive director at the Research Institute for Housing America, said in a statement shared with Newsweek. "MBA expects that affordability conditions will continue to improve as mortgage rates decline, which should generate increased demand heading into the spring homebuying season."
The decline in rates improved affordability for homebuyers across American demographics--Black, Hispanic and white households all saw improvement in mortgage payments in November, MBA said.
The activity in the housing market has picked up over the last month as rates ticked down. On Wednesday, the used homes market, which had been frozen as mortgage rates soared to two-decade highs, surprisingly rebounded. Sales rose nearly a percent in November from the previous month, breaking a five-month losing streak.
"It kind of signals that as mortgage rates fell through November that perhaps we can expect existing home sales to climb even more," Hannah Jones, an economic research analyst at Realtor.com, told Newsweek on Wednesday.
New Listings Climb
The increase in sales activity was also reflected in the listings that Realtor.com was seeing on their platform, Jones said. New listings on the platform were up 7.5 percent for the year in November, a development she expected to continue.
Mortgage payments might be getting more affordable, but prices are still elevated on the back of low supply of homes that is struggling to meet heightened demand.
The National Association of Realtors (NAR) pointed out Wednesday that housing inventory fell nearly 2 percent to a little over 1.1 million homes.
"Home prices keep marching higher," Lawrence Yun, NAR's chief economist, said. "Only a dramatic rise in supply will dampen price appreciation."
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Uncommon Knowledge
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
About the writer
Omar Mohammed is a Newsweek reporter based in the Greater Boston area. His focus is reporting on the Economy and ... Read more
