In November, the housing market began to show signs of improved affordability as mortgage rates declined and rents decreased significantly. According to Zillow's latest Market Report, the cost of a new mortgage decreased by 4.8%, leading to a typical monthly mortgage payment in the US dropping by around $100. While Zillow notes that it is unlikely that affordability will significantly improve in the near future, the November data suggests that affordability may stabilize in 2023.

The housing market is also showing signs of balancing, with neither buyers nor sellers having the upper hand in negotiations. The RE/MAX National Housing Report for November showed a moderation in prices and a 12% decrease in home sales compared to October's figures. New listings fell to their lowest level of the year, while houses for sale remained on the market for an average of 39 days, which was a week longer than in November 2021. The median sales price in November was $394,000, a 1.3% decrease from October but a 3.7% increase from November 2021.

The decline in mortgage interest rates also led to a surge in demand for mortgage refinancing, with the Mortgage Bankers Association's seasonally adjusted index showing a 6% increase in applications to refinance a mortgage last week compared to the week before. However, volume was still 85% lower than during the same period the previous year. Despite the weak demand for new construction, economists expect that if mortgage rates continue to trend down, more buyers may return to the market later in the year as affordability improves. Potential market-moving reports for the week of December 26th include the US Home Price Index, Pending Home Sales Index, Initial and Continuing Jobless Claims, and the Chicago PMI.