With mortgage rates dropping to their lowest levels in almost a year, house hunters are returning to a market that many had shied away from in 2023. 

For the week ended Dec. 28, the average 30-year fixed mortgage rate was 6.61%, the lowest rate since May. 

A new report from Redfin found the median housing payment in the U.S. has fallen $400 from its October peak, enticing buyers back to the market as they take advantage of lower mortgage rates and an influx of new inventory.

During the four weeks ended Dec. 31, new home listings rose 10% year over year, and the median mortgage payment fell to $2,361, down 14% from October’s all-time high and its lowest in nearly a year. 

And buyers are taking notice.

According to Redfin’s Homebuyer Demand Index, requests for tours and services from Redfin agents are up 10% from November and at their highest level since August. Pending sales, though down 3% from last year, had their smallest decline in two years. 

“There have been more tours and more offers on my listings since mortgage rates started declining,” said Redfin Premier agent Shay Stein. “It’s all about perspective: Two years ago, buyers would have cried about a 6% mortgage rate. Now, they’re happy they’ve dropped down to the mid-sixes.”

In the four weeks ended Dec. 31, active listings fell 3.9% from last year, the smallest decline since June. Meanwhile, new listings rose 9.5% from last year.

The median asking price rose 4.3% to $359,236. Meanwhile, the median sale price increased 4.4% year over year to $363,371, the biggest increase since October of 2022.