Housing Payments Fall To Two-Year Low As Mortgage Rates Ease
U.S. housing payments have fallen to a two-year low as mortgage rates dip, but seasonal factors and economic uncertainty are keeping buyers and sellers on the sidelines at the outset of 2026
Redfin (part of Rocket Companies) has reported a notable decline in U.S. housing costs, with median monthly housing payments falling to $2,365 during the four weeks ending January 4, 2026, down 4.7% year-over-year, marking the lowest level recorded in two years.
The decline in housing payments is tied directly to falling mortgage rates, with the weekly average 30-year fixed rate dropping to 6.15%, the lowest in over a year. This represents a substantial reduction from rates near 7% at the beginning of 2025.
Despite these improved affordability metrics, the housing market has not experienced an immediate surge in buyer activity. Redfin economists attribute this lag to seasonal factors and broader economic headwinds, describing current market conditions as a “holiday hangover” that has tempered homebuying demand.
“The housing market is in its holiday hangover season,” said Chen Zhao, Redfin’s head of economic research. “Prospective homebuyers are focused on getting back into work and school mode rather than hunting for houses — and in some parts of the country, snowy or wet weather is an obstacle. With mortgage rates and housing payments meaningfully lower than they were a year ago, we may see some buyers emerge in the coming weeks — and if buyers come, sellers are likely to follow.”
Data from the report show that pending home sales are down 6.7% year-over-year, and new listings have declined by 8.3%, suggesting that both buyers and sellers remain cautious heading into 2026.
Redfin’s economic research also finds that while home prices continue to rise — climbing 1.1% year-over-year — the pace of price growth has slowed compared with 2025 levels.
Redfin agents in some regions report early signs of renewed buyer interest, with increased house-hunting activity noted in areas such as Kansas City, Missouri. Agents point to longer days on the market and some sellers reducing prices as potential catalysts for emerging demand.