More Homes Hit the Market as Spring Approaches, But 7% Mortgage Rates Keep Buyers on the Sidelines

Written by Posted On Sunday, 25 February 2024 01:02

New listings posted their biggest increase in two months this week, but mortgage applications and pending sales declined as rates stay stubbornly high

New listings rose 10% year over year during the four weeks ending February 18, the biggest increase in two months, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. Sellers are hoping to take advantage of high prices: Sale prices are up 6% year over year, the biggest increase since October 2022.

But many buyers are still sitting on the sidelines. Mortgage-purchase applications dropped 10% from a week earlier as daily average mortgage rates surpassed 7% for the first time since mid-December, and pending home sales are down 7% year over year, similar to the declines seen since mid-January. But some house hunters are jumping into the earliest stages of homebuying: Redfin’s Homebuyer Demand Index, which measures requests for tours and homebuying assistance from Redfin agents, is up from the low point it dropped to in mid-January, when harsh weather was freezing up demand.

Redfin agents report that today’s buyers are mostly interested in move-in ready homes because they don’t want to spend money on repairs and renovations in addition to high monthly payments. Agents also recommend that sellers are open to providing some sort of financial concession to buyers to help ease the pain of 7% rates.

“I tell every one of my sellers to have an open mind and put on their buyer's hat. Nine times out of 10, buyers are asking for a concession in their initial offer right now—and usually the seller needs to accept it to seal the deal,” said Shauna Pendleton, a Redfin Premier agent in Boise, ID. “The most common concession buyers are asking for is a mortgage-rate buydown. Requests for sellers to cover the closing costs are also common. I most often see buyers ask for concessions for more affordable homes—anything under $500,000 here in Boise—but I see some concessions on expensive homes, too.”

Leading indicators

Indicators of homebuying demand and activity

 

Value (if applicable)

Recent change

Year-over-year change

Source

Daily average 30-year fixed mortgage rate

7.14% (Feb. 21)

Up from 6.92% a month earlier

Up from 6.78%

Mortgage News Daily

Weekly average 30-year fixed mortgage rate

6.77% (week ending Feb. 15)

Up from 6.64% a week earlier

Up from 6.12%

Freddie Mac

Mortgage-purchase applications (seasonally adjusted)

 

Down 10% from a week earlier (as of week ending Feb. 16)

Down 13%

Mortgage Bankers Association

Redfin Homebuyer Demand Index (seasonally adjusted)

 

Up about 5% from a week earlier (as of week ending Feb. 18)

Down 15%

Redfin Homebuyer Demand Index, a measure of requests for tours and other homebuying services from Redfin agents

Google searches for “home for sale”

 

Down 4% from a month earlier (as of Feb. 17)

Down 15%

Google Trends

Touring activity

 

Up 10% from the start of the year (as of Feb. 20)

At this time last year, it was up 14% from the start of 2023

ShowingTime, a home touring technology company

Key housing-market data

U.S. highlights: Four weeks ending February 18, 2024

Redfin’s national metrics include data from 400+ U.S. metro areas, and is based on homes listed and/or sold during the period. Weekly housing-market data goes back through 2015. Subject to revision.

 

Four weeks ending February 18, 2024

Year-over-year change

Notes

Median sale price

$364,751

5.8%

Biggest increase since Oct. 2022

Median asking price

$396,000

5.6%

 

Median monthly mortgage payment

$2,636 at a 6.77% mortgage rate

7.9%

Down less than $100 from all-time high set in October 2023

Pending sales

74,092

-6.7%

 

New listings

76,216

9.8%

Biggest increase since Dec. 2023

Active listings

753,204

-1.8%

 

Months of supply

3.9 months

+0.1 pt.

4 to 5 months of supply is considered balanced, with a lower number indicating seller’s market conditions

Share of homes off market in two weeks

36.5%

Up from 35%

 

Median days on market

50

-2 days

 

Share of homes sold above list price

22.9%

Up from 21%

 

Share of homes with a price drop

5.7%

+1.4 pts.

 

Average sale-to-list price ratio

98.3%

+0.5 pts.

 

Metro-level highlights: Four weeks ending February 18, 2024

Redfin’s metro-level data includes the 50 most populous U.S. metros. Select metros may be excluded from time to time to ensure data accuracy.

 

Metros with biggest year-over-year increases

Metros with biggest year-over-year decreases

Notes

Median sale price

San Diego, CA (15%)

Newark, NJ (14.3%)

Anaheim, CA (13.5%)

Philadelphia, PA (12.6%)

West Palm Beach, FL (12.4%)

San Antonio, TX (-4.1%)

Austin, TX (-0.4%)

Fort Worth, TX (-0.3%)

Declined in 3 metros

Pending sales

Austin, TX (5%)

San Jose, CA (1.9%)

San Antonio, TX (-31.8%)

Cleveland, OH (-25.2%)

Warren, MI (-23.5%)

Portland, OR (-20.7%)

New Brunswick, NJ (-18.4%)

Increased in 2 metros

New listings

Jacksonville, FL (33.5%)

Dallas, TX (33%)

Fort Worth, TX (26%)

Fort Lauderdale, FL (25.3%)

Austin, TX (22.6%)

Cleveland, OH (-25.3%)

Atlanta (-13.3%)

Milwaukee, WI (-9.5%)

Warren, MI (-6.7%)

Newark, NJ (-6.3%)

Declined in 11 metros

To view the full report, including charts, please visit:

https://www.redfin.com/news/housing-market-update-new-listings-increase-sales-decline

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About Redfin
Redfin (www.redfin.com) is a technology-powered real estate broker, instant home-buyer (iBuyer), lender, title insurer, and renovations company. We sell homes for more money and charge half the fee. We also run the country's #1 real-estate brokerage site. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. 

https://www.redfin.com

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