Falling mortgage rates appear to have brought more buyers out in December than in November, according to a new report from brokerage and listings portal Redfin.

The company’s economists said 48.3 percent of offers Redfin agents wrote in Greater Boston last month met with at least one competing offer, compared to 43.9 percent the month before. To put that figure into perspective, November 2021 saw a over 68 percent of Redfin agents’ offers meeting competition.

The average interest rate on a 30-year, fixed-rate mortgage had soared from 6.7 percent at the start of October to 7.08 percent for the seven days ending Nov. 10, according to Freddie Mac, the highest it had been in years. Then, over the course of November it slowly slid down through mid-December to 6.27 percent before rising to 6.48 percent as the month closed.

That decline added around $200 to the median American’s homebuying budget, Redfin said.

“Along with the dollar decline in monthly payments, rates traveling down instead of up are helping some sidelined buyers get back into a house-hunting mindset,” Redfin Economics Research Lead Chen Zhao said in a statement.

However, the lower rates and one metric of increased competition may not ultimately have moved the needle on pending sales. The Greater Boston Association of Realtors reported only 538 pending single-family sales in its territory – generally, Boston’s urban core and suburbs along the Route 128 corridor, plus much of MetroWest – in December, along with 520 condominium sales. Those figures were down 35 percent and 19.8 percent month-over-month and 22.8 percent and 32.6 percent year-over-year.

Since the end of December, that softening of mortgage interest rates has continued with the rate falling to 6.13 percent this week. Yesterday, the Mortgage Bankers Association said the declines appear to be encouraging some buyers to jump back into the market, with purchase mortgage applications rising 3 percent across America.

“Homebuying activity remains tepid, but if rates continue to fall and home prices cool further, we expect to see potential buyers come back into the market. Many have been waiting for affordability challenges to subside,” MBA deputy chief economist Joel Kan said in a statement.

“As people realize that the 3% rates are not coming back anytime soon, mortgage applications have picked up. What should we expect from the housing market as the spring season is nearing? Generally, home sales activity increases by 33% in March compared to February, with nearly 420,000 homes sold on average in March,” Nadia Evangelou, senior economist and director of real estate research at the National Association of Realtors, said in a statement. “However, in the last couple of years, activity was even busier due to low mortgage rates. Even though rates were rising last March, many buyers were rushing to benefit from the 4% rates during that time. Given low affordability and inventory, activity may not ramp up so fast in the spring season this year, but it will definitely be busier than it currently is. Meanwhile, a stronger housing market could help the U.S. economy to skirt a recession.”

Boston Buyer Competition Warmed Slightly as Rates Fell

by James Sanna time to read: 2 min