Demand from homebuyers continues to rise from its tumbling low despite mortgage rates rising this week, according to a new report from Redfin, a technology-focused real estate brokerage. Vendor activity is also picking up.
Pending home sales posted their smallest decline since September in the four weeks ending Feb. 5, falling 20% from a year earlier, and mortgage purchase applications rose 3 % compared to the previous week. Redfin’s Homebuyer Demand Index – a measure of requests for viewings and other services from Redfin agents – hit its highest level since September.
More and more houses are coming on the market to meet the growing demand; new listings fell 17% from a year earlier, but this was the smallest drop in more than four months.
Although mortgage rates have risen this week, they are still down about a full percentage point from their peak at the end of 2022. Sellers have started to pull back.
“On Super Bowl weekend, we usually have a good idea of how the real estate market is doing in any given year. But this year is anything but typical,” said Chen Zhao, head of economic research at Redfin. “This year is more uncertain than most because the effects of last year’s rapid rate hikes are still being felt in the economy, and we don’t know how much further the Fed will raise rates this year. So even after the Super Bowl rolls in and out, we’ll be watching the Fed’s words and actions closely, as well as inflation rates and labor market health indicators for potential signals. affect homebuyer demand.
Leading indicators of home buying activity:
- For the week ending February 9, the average 30-year fixed mortgage rate was 6.12%, up slightly from 6.09% the previous week, but down from the 2022 high of 7, 08% in November. The daily average was 6.32% on February 9, down from 5.99% a week earlier.
- Requests to buy mortgages in the week ending Feb. 3 were up 3% from the previous week, seasonally adjusted. Purchase requests decreased by 37% compared to the previous year.
- The seasonally adjusted Redfin homebuyer demand index hit its highest level since September in the week ending Feb. 5. It was up 21% from its October low, but down 25% from a year earlier.
- Google searches for “homes for sale” are up about 38% from their November low in the week ending February 4, but down about 23% year-on-year former.
Housing market highlights for over 400 metropolitan areas:
Unless otherwise stated, this data covers the four-week period ending February 5. Redfin’s weekly housing market data dates back to 2015.
- The median home sale price was $346,769, up 0.9% year over year.
- Median selling prices fell in 18 of the 50 most populous metros, with the largest declines in Oakland, Calif. (-9.7% year-over-year); Austin, TX (-6.5%); Sacramento (-5.8%); San Francisco (-4.9%) and Phoenix (-4.6%). Prices rose the most in Milwaukee (12.8%), West Palm Beach, Florida (12.3%), Indianapolis (10.1%), Fort Lauderdale, Florida (9.8%) and Miami (8. 4%).
- The median asking price for newly listed homes was $376,160, up 1.7% year-over-year.
- The monthly mortgage payment on the home at the median asking price was $2,376 at a mortgage rate of 6.12%, the current weekly average. That’s down $131 (-5.2%) from the October high. Monthly mortgage payments were up 25.1% ($477) from a year ago.
- Pending home sales fell 19.5% year over year, the smallest decline since September.
- Among the 50 most populous metropolises, pending sales fell the most in Las Vegas (-58.7% YoY), Nashville (-50.6%), Phoenix (-50.1%), San Jose (-49.7%) and Austin (-48.9%). Pending sales increased in two metropolises: Cincinnati (31.5%) and Chicago (31.4%).
- New listings of homes for sale fell 16.5% year over year. This is the smallest drop since September.
- New registrations fell in the 50 most populated metros. They fell the most in Oakland (-40.5%), Sacramento (-39%), San Jose (-38.1%), San Diego (-38%) and Las Vegas (-37.6%). They were down less than 1% in Nashville, Dallas and Austin.
- Active listings (the number of homes listed for sale at any time during the period) rose 22.6% from a year earlier.
- Months of supply – a measure of the balance between supply and demand, calculated by the number of months it would take for current inventory to sell at the current rate of sale – was 4.1 months , compared to 2.2 months a year earlier.
- 42% of homes under contract had an offer accepted within the first two weeks on the market, the highest level since July, but down from 50% a year earlier.
- Homes sold were on the market for a median of 50 days. That’s up from 34 days a year earlier and the record 18 days set in May.
- 20% of homes sold above their final list price, down from 39% a year earlier and the lowest level since March 2020.
- On average, 5.4% of homes for sale each week saw a price drop, down from 2.1% a year earlier.
The average sale-to-listing price ratio, which measures how well homes are selling relative to their final asking prices, fell to 97.7% from 100% a year earlier. This is the lowest level since March 2020.