Buying a Home: Easier Now, But Saving for a Down Payment Remains Tough

Home prices across the country are not rising as fast as they used to. In fact, they are almost the same as they were a year ago. Some cities, like Chicago and New York, have seen prices go up. But others, like Tampa and Phoenix, have seen prices drop. Mortgage rates have also gone down. The average rate for a 30-year fixed mortgage is now around 6. 19%. This is a big change from the start of the year when rates were over 7%. Lower rates mean buyers can save money each month. For example, someone buying a home around the national median price of $410, 000 with a 20% down payment would pay $200 less each month than they would have a year ago.But even with these improvements, saving for a down payment is still hard. It now takes about 7 years to save for a down payment. That's better than the 12 years it took in 2022, but still much longer than before the pandemic. The personal savings rate is also lower now than it was in 2020, making it even harder to save. There are more homes for sale now than there were a year ago. Active listings are up by about 12%. However, there are still fewer homes for sale than before the pandemic. But buyers are starting to respond to these changes. Pending home sales, which count signed contracts on existing homes, rose in November. They were higher than in October and November of last year, hitting the highest level in nearly three years. Experts say that lower mortgage rates and wage growth are helping buyers. More inventory choices compared to last year are also attracting more buyers to the market.