Mortgage rates are declining after last week’s cooler-than-expected jobs report made it clear the Fed will cut interest rates again this month. The average weekly rate is 6.69%, down from a four-month high of 6.84% two weeks earlier. That has pushed the typical U.S. homebuyer’s monthly housing payment down to $2,527, its lowest level in more than two months. 

Redfin’s Homebuyer Demand Index–a seasonally adjusted measure of tours and other buying services from Redfin agents–is up 8% year over year to just shy of its highest level since April, and mortgage-purchase applications are up nearly 20% from a month ago. Pending home sales rose 4.1% year over year during the four weeks ending December 8, similar to the increases we’ve seen over the last two months. 

Declining mortgage rates are one reason homebuyers are hitting the pavement. But there are two more impactful reasons demand is improving: The financial uncertainty surrounding the presidential election has passed, and buyers have accepted the fact that mortgage rates are likely to remain above 6% for the foreseeable future. 

“This week’s data shows the increase in signals like home tours and mortgage applications from the last month is continuing. The recent decline in mortgage rates isn’t pushing demand to new heights,” said Chen Zhao, Redfin’s economic research lead. “Rather, demand is settling into its new, post-election normal. In the months leading up to the election, house hunters were hibernating; demand was slower than we would have expected, even with high mortgage rates. Now, early-stage demand has jumped up to where we’d expect it to be.”

On the selling side, new listings are up 7.9% year over year, the biggest increase since June (except the 4 weeks ending November 24, when the increase was inflated due to Thanksgiving). Sellers are becoming more active for similar reasons as buyers. Additionally, some sellers are listing in hopes of taking advantage of the increased demand we’ve seen over the last several weeks.