Momentum Returning to Homebuying Market?

Redfin is reporting that U.S. pending home sales have dropped 4% year-over-year during the first four weeks of December 2023, representing the smallest decline since March 2022, according to a new report from real estate brokerage. 

According to Redfin’s data, the weekly 30-year fixed-rate mortgage now stands at 6.67%, the lowest level since June of this year, but up from 6.27% year-over-year. 

Seasonally adjusted mortgage-purchase applications are down 1% from last week, but up 7% from a month earlier. Year-over-year, this number is down 18% according to the Mortgage Bankers Association. 

The Redfin Homebuyer Demand Index, which is a measure of requests for tours and other homebuying services reported by Redfin agents, is down 6% year-over-year, while Google searches for “homes for sale” are up 8% month-over-month. 

The median reported sales price of an existing home is now $364,250, down 4.5% year-over-year, but still represents the biggest increase since October 2022. Prices are up partly because rapidly rising mortgage rates were hampering prices during this time last year. 

The median asking price for a home now stands at $364,484, a 5.1% year-over-year increase, while the median monthly mortgage payment is now $2.410 at a 6.67% mortgage rate (assuming a 20% down payment). This number is down $334 (-12.2%) from all-time high set during the four weeks ending Oct. 22 and the lowest level since February. 

Pending sales for the first four weeks of December 2023 were 57,600 and new listings numbered 53,243 homes, the biggest uptick in inventory since June 2021. The increase is partly because new listings were falling at this time last year. Active listings now stand at 817,863 representing about 3.6 months of inventory. Four to five months of inventory is considered balanced. 

The median days on market for a typical home is 39 days, a two-day reduction year-over-year.