3 Cautiously Optimistic Takeaways From November’s Market Report

In mid-November, 30-year fixed mortgage rates dropped by the largest weekly amount since 1981. Normally that would mean great news for the real estate market, but rates falling from more than 7% to 6.61% still left many buyers priced out.

As affordability issues persist, Zillow Senior Economist Nicole Bachaud shares three data-driven takeaways about the current market — including ways agents can help clients find lower monthly payments. 

Despite elevated mortgage rates, recent drops may persuade some buyers to act fast.

Key stats: In October, the average monthly mortgage payment hit $1,910, up 77% compared to that time last year. 

But since November 17, rates have decreased four consecutive weeks, and Fed chair Jerome Powell suggested interest rate increases could slow. Keep an eye on the Fed announcement slated for Wednesday, December 14.

Help buyers stay ready. “While rates are this high, any of those small movements really do make a significant impact on a monthly mortgage payment,” Bachaud says. “That probably allowed a lot of buyers to finally say, ‘I'm ready to go.’ Being ready can really help those folks be able to move and take advantage of that power when the market presents itself.”

Takeaway: These silver linings could motivate buyers and sellers to act now in case rates potentially increase later on.

In many markets, the scales are tipping in favor of buyers who can afford to stick around.

Key stats: In mid-October, 46% of homes had been listed for at least 60 days, roughly double the share that remained on the market that long in July. 

As of the end of November, the typical home is going from for-sale to pending after 23 days. In the same period in 2021, that process took just 10 days, and in 2020, just 13 days. But for perspective, the 2022 timeline is still ahead of the 2019 pre-pandemic timeline when the typical house went to pending after 34 days this time of year.

“This is one of the reasons why inventory numbers might be increasing,” Bachaud says, “Because homes are staying around longer, and that's giving buyers more time.'

Buyers face less competition: “We're seeing more and more sellers meeting buyer expectations or shifting their own expectations,” Bachaud says. “Sellers are really trying to list appropriately. As a result, we're seeing buyers really regaining negotiating power.”

Takeaway: Buyers continue to jump on the most desirable homes, but expectations for all other listings are changing. 

Down payment assistance can ease the burden of high mortgage payments. Agents can help clients find it.

Key stats: Like last month, it’s still cheaper to rent than buy for the median U.S. household. The typical monthly mortgage payment costs $349 more than the typical monthly rent payment. That difference stretches well over $1,000 in major markets like San Francisco, Seattle, and Boston. 

“We can't really do much about mortgage rates,” Bachaud says. “Assistance programs are opportunities to reduce a burden that’s very significant right now.”

Every chance to save matters. Alerting clients to extra financial assistance can help increase their down payment, which reduces the loan balance and thereby the monthly payments. This can help ease the pain of higher interest rates, which may linger for some time.

Takeaway: Every listing on Zillow provides a link to down payment assistance programs that may be available for the listed property.

Wondering how your local market is trending? Check out this public data dashboard built for agents from Zillow data. Select your region from the drop-down menu to see local data on median sales price, home sales volumes, days on market, and more.