As home price growth has slowed, mortgage payments have decreased and days on market have risen, homebuyers are dipping their toes back into the market again, a new report from Redfin says.

The typical U.S. home sold for nearly $40,000 less during the four weeks ending Dec. 18 than it did during a peak in June of $391,000. Average mortgage rates also dropped to 6.27 percent, taking about $300 off the typical homebuyer’s monthly housing payment since rates peaked in late October at 7 percent. Meanwhile, the typical home for sale sat on the market for 39 days before going under contract, its longest period since August 2020.

Quite a few buyers have come out of the woodwork in the last few weeks as rates have fallen. Many people who were outbid on multiple homes during the buying boom want to seize this moment because they can take their time touring homes and negotiate on price and terms with sellers. Today’s market isn’t nearly as hot as it was earlier this year, but it’s getting warm.

So far, the slight increase in demand has not contributed to an increase in pending home sales or new listings, Redfin’s report said. The change is unlikely to reflect in that data until mid-January due to a slowdown over the holidays, and because new listings will likely not recover until spring, Redfin economists said.

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