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Higher Mortgage Rates Boosting Buyer Urgency

In an unseasonable move, home prices and the rate at which they sell both ticked upwards in October, bucking trends that usually see a cooling during this time of year. 

According to a new report from Redfin [1], the October median home sale price increased to $357,007 which was a 1.5% increase from last month and a 13% increase from last year.  

The asking price of newly listed home also increased by 12% year-over-year to $357,381. When compared to pre-pandemic numbers the asking price of a newly-listed home has increased by an astounding 27% since 2019. 

Mortgage rates, while on the rise over the last few weeks, fell to 3.09% for the week ending November 4, prompting buyers and refinancers to take advantage of the low rates before they climb again. 

“Rising mortgage rates have lit a fire under many homebuyers,” said Redfin Chief Economist Daryl Fairweather [2]. “Fear of missing out (FOMO) is always a powerful force in this supply-constrained housing market, but especially so today for buyers who weren’t able to snag a home last year before mortgage payments shot up by 15%. With this renewed FOMO, the housing market is heating up from the slight lull a few months ago.” 

The report, which was authored by Redfin Economist Tim Ellis, [3] also found: 

A full copy of Redfin’s report can be found here. [5]