By Naveen Athrappully

The median U.S. monthly housing payment declined to $2,413 during the four weeks ending Jan. 11, the biggest decline since October 2024, and down 5.5 percent on an annual basis, according to a Jan. 15 report by real estate brokerage Redfin.

“Housing payments are coming down because mortgage rates are falling,” Redfin stated. The 30-year fixed-rate mortgage averaged 6.06 percent as of Jan. 15, hitting its lowest level in over three years, according to Freddie Mac. The mortgage rate has registered a nearly 14 percent annual drop from 7.04 percent on Jan. 16, 2025.

The recent decline in rates has been attributed to President Donald Trump’s decision to order federal agencies to purchase $200 billion ‌in mortgage bonds in order to lower housing costs.

There’s an inverse relationship between mortgage bonds and interest rates. When major buyers make purchases of large volumes of mortgage bonds, their yields fall, and when yields fall, mortgage lenders offer lower rates to borrowers.

However, home sale prices are on the uptick. The monthly housing payments would be falling even further were it not for still-rising sale prices, Redfin said.

According to the brokerage, prices are up 1 percent annually, but the increase is not significant considering there was a 4 percent to 5 percent uptick at the beginning of 2025.

Based on Redfin’s national metrics data collected from over 400 U.S. metro areas, the median home sale price is $380,606, as of Jan. 11, with an asking price of $380,825.

“Right now, homes are sitting on the market for several months, and a lot of sellers are cutting their asking price,” said Portland-based Redfin agent Meme Loggins. “Buyers know that’s unlikely to last long, especially with rates coming down. Prospective buyers know competition will probably tick up by springtime, so they’re getting serious about house hunting and getting a deal while they can.”

There are over 996,087 active listings in the marketplace with 5.1 months of supply. The median days on market for a listing is 59, with one in five homes sold above the list price.

Builder Sentiment and Mortgage Applications

High home prices and rising construction costs are weighing down builder confidence at the start of the year.

According to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) numbers published on Jan. 16, builder confidence in the market for newly built single-family homes fell two points to 37 in January.

“While the upper end of the housing market is holding steady, affordability conditions are taking a toll on the lower and mid-range sectors,” said NAHB Chairman Buddy Hughes. “Buyers are concerned about high home prices and mortgage rates, with downpayments particularly challenging given elevated price to income ratios.”

Furthermore, according to the latest HMI survey, 40 percent of builders reported cutting prices this month, and the average price reduction was 6 percent in January, up from the 5 percent rate in December, NAHB said.

On a positive note, the Mortgage Bankers Association (MBA) survey data for December 2025 showed that mortgage applications for new home purchases increased 2.5 percent on an annual basis.

“December purchase activity for newly built homes continued to run stronger than last year, despite cooling slightly from the prior month,” said Joel Kan, MBA’s vice president and deputy chief economist. “New homes remain a viable option for many homebuyers given that there is a relatively large number of new homes available for sale, which has prompted incentives and price reductions from builders in some markets.”

According to Kan, new home sales in 2026 are forecast to increase gradually provided mortgage rates do not expand significantly and home prices remain “muted, given the excess inventory.”