Home Prices Rise as Lower Mortgage Rates Lure Buyers Back Into the For-Sale Market

As homebuyer demand rebounded in response to a slight dip in mortgage rates, the median U.S. home-sale price increased 0.9% year-over-year to $350,250 during the four weeks ending Jan. 15, the biggest increase in a month, Redfin reports. Mortgage-purchase applications also rose 25% from the week before, a jump that could lead to an uptick in home sales over the coming weeks, especially if rates remain at the current 6.15% level.

A resurgence of buyer activity is also motivating more homeowners to sell in the first weeks of 2023. New for-sale listings fell 20% year-over-year during the four weeks ending Jan. 15, the smallest decline in two months.

“The people who started browsing homes online and scheduling house tours at the end of 2022 are now turning into actual homebuyers,” said Redfin Deputy Chief Economist Taylor Marr. “Low competition, falling mortgage rates and seller concessions are bringing some buyers back to the market. That’s helping keep national home prices afloat, which is one bright spot for sellers. But many buyers are still sitting on the sidelines and demand could dip back down if inflation declines slower than expected or mortgage rates rise again.”

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