Here’s how much buyers are saving on monthly payments as mortgage rates drop

After months of hitting record highs, mortgage rates are showing signs of easing, lightening the budgets of would-be homebuyers.

Mortgage rates have fallen from their peak in the fall, saving new homebuyers nearly $300 a month on their monthly payments, according to a RedFin analysis.

Looking at mortgage rates for the week ending Dec. 23, RedFin found that the typical U.S. home has a monthly payment of about $2,254 and a mortgage rate of 6.27%.

That’s $267 less than when mortgage rates peaked at around 7% in October.

“As interest rates have come down over the past few weeks, a significant number of buyers have come out of millwork. Many people who have bid more than multiple homes during a buying spree want to take advantage of this opportunity because they can take the time to tour the homes and talk to the sellers Negotiate the price and terms,” ​​said RedFin broker Shoshana Godwin.

Homebuyers have been battling record-high mortgage rates, which have reduced the cost of homes they can afford. Average mortgage payments are still about 35% higher than a year ago, and homebuyers lost about $140,000 in purchasing power when interest rates hit about 6%.

With mortgage rates falling and buyers becoming more comfortable with rates, there are signs buyers may be returning to the market.

Mortgage purchase applications were up 4.6% compared with the previous month, while the homebuyer demand index, which tracks travel requests, was up about 6.5%, according to RedFin.

According to the latest survey by the Mortgage Bankers Association, the current rate is about 6.34%.

“However, if mortgage rates continue to trend downward, as we forecast, more buyers may return to the market later in the year as affordability improves as rates fall and home price growth slows, ” points out MBA’s Mike Fratantoni. Chief Economist, Senior Vice President of Research and Industrial Technology.