Homebuyers are finally feeling relief now that soaring mortgage rates have reversed and monthly payments are at their lowest level in 8 months

After more than a year of mostly rising mortgage rates, homebuyers have something to cheer about.

The average 30-year fixed mortgage rate fell to 6.62% today, to its lowest level since May, after the Federal Reserve left interest rates unchanged and signaled three interest rate cuts next year.

Fed Chair Jerome Powell’s move indicated the central bank is “on a path toward lowering interest rates more and sooner than expected,” said Dana Anderson, a data journalist for Redfin who authored her company’s weekly housing market update that was published on Thursday. She added that is yet another sign that mortgage rates could drop to a mid-6% range next year, in line with a forecast by Redfin’s chief economist, Daryl Fairweather, who predicts mortgage rates of  around 7% in the first quarter of next year, before dropping to 6.6% by the end of the year.

“Mortgage payments are at their lowest level in eight months,” Anderson wrote, adding that even before yesterday’s Fed announcement, mortgage rates were falling.

Of course, mortgage rates are still more than double their pandemic lows and the several years prior, but they’ve fallen substantially from their peak in October of just above 8%. In the four weeks ending December 10, the median housing payment (calculated at a 7.03% mortgage rate) was $2,503, according to Redfin, which it said is down $233 from October’s record high—and the lowest payment since April.

The difference is huge between a monthly payment at an 8.03% mortgage rate, the 52-week high, and one at 6.82%, yesterday’s rate. On a $600,000 mortgage at a 30-year fixed rate at 8.03%, the monthly payment would be $4,415, excluding taxes and insurance. At 6.82%, the payment would be $3,920—an almost $500 difference. To take it a step further, using today’s rate at 6.62%, the monthly payment would be $3,840.

The declining rates have helped to open the door to some homebuyers who had been priced out of the market. Mortgage purchase applications are up 19%, after falling to a three-decade low in November, according to Redfin. Additionally, Redfin’s homebuyer demand index, which measures requests for tours and other services offered by Redfin real estate agents, is up 3% from last month.

But it’s not all good news for buyers. In Redfin’s latest report, for one, the median home sale price was up 4.5% year-over-year over the four weeks ending December 10, at $364,535, Redfin said, the biggest jump since October 2022. Meanwhile, the median asking price was  $368,247, up 5.7% year-over-year, according to the report.

“Prices are rising because demand is outpacing supply,” Anderson wrote. That’s despite the fact that new listings are up 8% year-over-year, the biggest increase since July 2021, because the total number of homes for sale is still down 5%.

It seems to align with a key aspect of Redfin’s housing outlook for next year, in which Fairweather wrote, “home prices will still be out of reach for many Americans, but any break in the affordability crisis is a welcome development nonetheless.”

While affordability may improve slightly, which others have suggested, it likely won’t completely reverse the problem of affordability that is worse now than during the height of the housing bubble in 2006. Still, aside from predicting lower mortgage rates next year, Fairweather expects home prices will fall 1% year-over-year in the second and third quarters of next year. She also expects that existing home sales, which have fallen to the lowest levels in more than a decade, to increase 5% on an annual basis to 4.3 million, as the lock-in effect of homeowners who are reluctant to sell because their mortgage rates are below the current level eases.

“We’re starting to see signs of a shift toward a buyer’s market as pandemic-driven inflation takes its last gasps,” Fairweather wrote in the outlook published earlier this month.

Separately, the rental market continues to soften. The median asking rent declined 2.1% year-over-year last month to $1,967, marking the biggest annual drop since February 2020, Redfin said in a report published yesterday. And as Fortune has previously reported, it’s largely because of an increase in supply due to a building boom that’s led to more vacancies and forced some landlords to drop asking rents and offer discounts. But just like home prices, rents are still high—nevertheless, would-be buyers and renters seem to be finding some relief.

This story was originally featured on Fortune.com