After a foul year to be a prospective homebuyer, people could be toasting more than just the new year in 2024.

Mortgage rates have fallen for seven consecutive weeks, and there's fresh speculation that the Federal Reserve Bank will lower rates in the coming year. That will likely trigger further declines in mortgage rates at a time when both buyers and sellers are trapped in a standoff: Those who can't find a suitable — or affordable — house vs. those who won't move so as not to lose their pandemic-low rate.

"There's pent-up demand," said Sharry Schmid, president of Edina Realty. "People are wanting to sell and buy."

This week, the average interest rate on a 30-year fixed-rate mortgage fell to 6.95%, dipping below 7% for the first time since August, according to a weekly Freddie Mac rate survey.

And Wednesday, Federal Reserve chairman Jerome Powell said the Fed would hold steady on its federal funds rate while also hinting at three rate declines in store for 2024.

Those comments sent the stock market to a new peak and turned attention to mortgage rates potentially easing even more next year. While mortgage rates aren't tied directly to the federal funds rate, they tend to follow its trajectory. They also tend to follow yields on 10-year treasury bonds, which declined slightly after the Fed's announcement.

This possible relief could bring an end to the buyer-seller stalemate. All year, sales have been down, but prices have held steady because there are more buyers than sellers in some parts of the Twin Cities.

Last month, there were 3,657 new listings throughout the metro, a 5.3% increase from last year at this time, according to a monthly sales report the Minneapolis Area Realtors released Friday. Despite that unusual annual increase, at the current sales pace, there were only enough listings on the market to last 2.1 months. (The market is evenly balanced between buyers and sellers when there's a four- to six-month supply of properties for sale.)

That persistent lack of listings and a decline in the number of people who can afford to buy them has stifled home sales. During November, there were only 2,807 pending sales, 1.5% fewer than last year.

"The recent dip in rates has definitely spurred some buyer interest," said Jerry Moscowitz, president of Minneapolis Area Realtors. "Buyers choosing to wait until spring should expect heightened competition."

Still, with too few houses for sale, buyers can't be choosey, nor can they be bargain hunters. On average, sellers garnered 99% of their asking price last month, causing the median price of all closings during the month to increase 2% to $362,000.

Rate relief is also coming at a time experts say is the best time to be a buyer. During the waning months of the year, when families are busy with the holidays and kids are still in school, house shoppers tend to be on hiatus.

This fall, with sales down double-digits and buyers still struggling with higher rates and smaller budgets, sellers showed signs of being eager to make a deal. From August through October, more than a third of Twin Cities buyers managed a seller concession, according to Redfin, an online brokerage. That figure was on par with the national average but up 11% compared with last year, making it the third biggest in the nation.

Those concessions don't take into account price cuts, as there were various "contributions" aimed at reducing the buyers' cost of buying a home, including cash toward closing costs and repairs. Seller concessions also include temporary mortgage-rate buy downs that help blunt today's higher borrowing costs.

Statewide, new listings were up 6.7% while sales declined by about the same amount, the Minnesota Association of Realtors said Friday. The median price of all closings was $327,200, a 5.5% increase from last year.

"It's clear buyers are responding to these changes," said Emily Green, president of Minnesota Realtors. "However, other factors like increasing property taxes and home insurance premiums are keeping homeownership out of reach for far too many."

Nationwide new listings and pending home sales last month both climbed to the highest level in nearly a year, Redfin said. The group attributes those increases to buyer and seller fatigue — many simply tired of waiting on the sidelines — and declining mortgage rates.

Mortgage rates hit the highest level in 23 years in October, which cooled homebuyer demand, driving some sellers to throw in freebies to attract bidders. That marks a reversal from the pandemic homebuying frenzy, when fierce buyer competition made concessions more rare.

Schmid is optimistic even slight rate declines will help pave the way for a less stressful spring market. With rates still nearly double the record lows buyers took advantage of in 2020 and 2021, she doesn't expect the kind of frenzy that forced buyers to pay tens of thousands more than the list price for some offers.

Still, assuming no economic surprises or global crises, she expects rates to dip low enough to unleash more listings and enable more buyers to enter the market. Her best guess is rates will settle in the 6% range, but she's heard some venture lower.

"I wish I had that crystal ball," she said. "But rates are coming down."

There is however, a potential downside for buyers. While a rate decline could unlock inventory and increase the number of buyers, it could also cause prices to increase as the number of buyers swells, boosting demand — and competition — at a time when listings are still relatively low.

Schmid encourages buyers to ask their lender for a mortgage that's easy and inexpensive to refinance should rates dip in the coming year, and she warns would-be buyers not to wait. Though listings could rise, she said, there's sure to be an increase in the number of buyers, as well.

"There's going to be more competition," she said. "But I'm optimistic."