January's Mortgage Rate Dip Prompts Some Thawing of the Housing Market

High interest rates for home loans have been one reason why buyers and sellers have been reluctant to enter the housing market, but January saw a downtick in mortgage rates, encouraging more buyers and sellers to enter the market. In January, sales volume for existing homes rose 3.1% from December to a seasonally adjusted annual rate of 4 million, its highest level since August 2023, according to financial content website Investopedia reporting on data from the National Association of Realtors.

The uptick highlighted how much would-be buyers and sellers have been waiting for lower interest rates. The contracts for those sales were likely signed one or two months earlier, at a time when the average rate offered for a 30-year mortgage was sliding down from its recent peak of nearly 8%, its highest in more than 20 years according to Freddie Mac.[2] The average rate was 6.77% last week.

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