Home prices nationwide are nearly flat compared to last year, with just a 0.3% increase, and some major cities even seeing declines.
The big picture: Mortgage rates have dropped significantly, with the average 30-year fixed rate at 6.19%, down from over 7% at the start of the year.
- Lower rates mean substantial savings for buyers; for example, a 20% down payment on a $410,000 home results in a monthly payment $200 less than last year.
- Despite improved affordability, the biggest challenge for homebuyers, especially first-timers, remains saving for a down payment.
- The typical homebuyer now needs seven years to save for a down payment, down from a recent 12-year peak but still double the pre-pandemic time due to lower personal savings rates.
Go deeper: Homeownership rates dropped to 65%, the lowest since 2019, in part because of the ongoing down payment hurdle.
- Buyers are responding to the improved market conditions; pending home sales rose more than expected in November, reaching their highest level in nearly three years.
- Inventory is improving, with active home listings up about 12% from last year, though still 6% below pre-pandemic levels.
