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A new market update report from Redfin finds that both buyers and sellers are in a conundrum; a venerable ‘chicken or the egg’ situation due to an uptick in inventory, and the fact that the entry price of those listings are rising because sellers are noticing more buyers are entering the market.
The report found multiple items of good news, including the fact that mortgage-purchase applications are on the rise, going up 3% week-over-week ending November 10, bringing them to the highest level in five weeks. Though, while pending sales were down 8% year-over-year ending November 10, that represents one of the smallest declines since April 2022. House hunters are coming off the sidelines because mortgage rates are dropping from their peak: average rates have declined from a two-decade high of 8% to the 7.4% range in the last month.
A promising inflation report from the Federal Reserve also spells good news for mortgage rates, which, according to Freddie Mac, are standing at about 7.5% (down from a 20-year high of 7.79% just a few weeks ago). If prior market indicators stand as predictors, the good news is that the Federal Reserve will likely forgo an interest rate hike at their next meeting—and may even start cutting rates earlier than expected into next year.
In addition, more sellers are jumping into the market during the time of year when numbers of both buyers and sellers typically drop. New listings jumped 3% year-over-year, the biggest increase in two years and just the second increase since July 2022. The total number of homes for sale is near its highest level since the start of the year. There’s a variety of reasons why more homeowners are putting their homes on the market: Some are noticing the small uptick in homebuyer demand, some are worried home prices are going to decline if they wait any longer, and others are ready to give up their low mortgage rate after realizing rates are unlikely to drop back to pandemic-era levels anytime soon.
Other notable data from the report includes:
- Median sale price: $367,998 (+4,2% year-over-year)
- Median asking price: $378,549 (+5.6% YoY)
- Median monthly mortgage payment: $2,670 (-$70 month-over-month)
- Pending sales: 66,773 (down 8%)
- New listings: 75,912 (+3.3% YoY)
- Active listings: 864,976: (down 8.7% MoM)
- Months of supply: 3.7 months (+0.1 point)
- Median days on market: 34 (down two days YoY)
- Average sale-to-list price ratio: 00% (+0.4%, the lowest level since April 2023)
Click here to read the report in its entirety.
