Homebuying demand, which has been battered of late due to the double whammy of elevated prices and high mortgage rates, has started to see a modest rebound as rates have descended, according to a new report from Redfin.

After mortgage rates peaked above 7% one month earlier, daily rates slipped to an average of 6.29% on Dec. 1. They were helped by comments from Federal Reserve Chair Jerome Powell, who suggested that the pace of the central bank’s aggressive rate increases may slow. The impact on demand has been noticeable, per Redfin’s metrics. Purchase mortgage applications recorded by the national real estate brokerage (seasonally adjusted for the Thanksgiving holiday) were up 4% from the previous week. Meanwhile, Redfin’s Homebuyer Demand Index, which gauges demand via the number of requests for home tours and other Redfin home services, rose by roughly 1.5% over the past month.

It’s important to note that year-over-year numbers remain down across the board. The Homebuyer Demand Index was down 20% annually during the four-week period ending Nov. 27, while touring activity at this time was down 53% from the start of 2022. Google searches for “homes for sale” during the week ending Nov. 26 were down approximately 40% from the same period in 2021.

But price declines are growing less common with rates on the downswing. On average, slightly more than 6% of homes listed each week during the four weeks ending Nov. 27 included a price drop. That’s a big decrease from the 7.2% share in the prior week and represents the lowest percentage since July 2022.

“There have been a handful of pieces of relatively good news for the housing market lately, but we’re far from out of the woods,” Redfin deputy chief economist Taylor Marr said. “Key indicators of homebuying demand will likely be teetering on a knife’s edge with every data release that comes out related to the Fed’s path to eventually bringing rates down.

“We’re likely past peak inflation, past peak mortgage rates and past the bottom for mortgage purchase applications,” Marr continued. “But there’s further cooling ahead for the housing market, as sales and prices have further to fall before buyers and sellers become comfortable with homebuying costs again.”