Homebuyers came out of the woodwork as mortgage
rates posted the biggest monthly decline since 2008
(NASDAQ: RDFN) — Pending home sales rose 4.1% month over month
in December on a seasonally adjusted basis–the biggest increase
since September 2021–to the highest level in more than a year.
That’s according to a new report from Redfin (redfin.com), the
technology-powered real estate brokerage. They climbed 5.9% from a
year earlier, the biggest annual gain since June 2021.
Pending sales jumped because a steep drop in mortgage rates
lured buyers to the market. The average 30-year-fixed mortgage rate
fell to 6.82% in December from 7.44% in November, the biggest
monthly decline since 2008. Buyers who were casually looking when
rates were above 7% are now getting serious, Redfin agents say.
The dip in mortgage rates has also brought sellers off of the
sidelines, though they haven’t returned with as much intensity as
buyers, likely because a majority of them don’t want to give up the
ultra low mortgage rate they scored during the pandemic. New
listings rose 0.1% month over month to the highest seasonally
adjusted level since September 2022, and were up 2.7% year over
year—the largest increase since July 2021.
While housing supply has ticked up, it remains below
pre-pandemic levels. Active listings, or the total number of homes
for sale, rose 3.1% month over month on a seasonally adjusted basis
but fell 5.1% from a year earlier.
“We’re definitely seeing an uptick in activity from both buyers
and sellers,” said Abby Alwan, a Redfin Premier real estate agent
in Austin, TX. “I have two listings in the suburbs that six months
ago would’ve sat on the market. But all of a sudden, buyers are
coming out of the woodwork thanks to lower rates. More folks are
looking to have conversations about what they need to do to enter
the market now that they’ve seen improvement in the market.”
It’s worth noting that while demand jumped in December, January
is off to a slower-than-expected start, likely due to severe winter
weather. Redin economists expect the market to pick up as spring
approaches, so long as mortgage rates don’t shoot up.
Home Prices Post Largest Increase in Over a Year
The median U.S. home sale price climbed 4% year over year to
$403,714 in December, the biggest annual increase since October
2022, and fell 1.1% month over month. Please note that home price
data is not seasonally adjusted, and it is not unusual for prices
to slow from a month earlier in December.
The recent uptick in homebuyer demand is likely contributing to
the rise in housing prices, but the primary driver of price
increases is America’s persistent shortage of homes for sale, which
is fueling competition in some areas.
“Bidding wars are happening again, but they’re much more
reasonable than they were during the pandemic homebuying frenzy,”
Alwan said. “Houses are getting between one and five competing
bids, and instead of offering one or two hundred thousand dollars
over the asking price, competitive buyers are offering 3% to 5%
over.”
December 2023 Highlights: United States
December 2023
Month-Over-Month
Change
Year-Over-Year Change
Median sale price
$403,714
-1.1%
4%
Pending sales, seasonally
adjusted
425,466
4.1%
5.9%
Homes sold, seasonally
adjusted
407,255
-0.5%
-4%
New listings, seasonally
adjusted
511,136
0.1%
2.7%
All homes for sale, seasonally
adjusted (active listings)
1,569,438
3.1%
-5.1%
Months of supply
2.6
-0.3
0
Median days on market
43
6
-2
Share of for-sale homes with a
price drop
14.2%
-5 ppts
0.5 ppts
Share of homes sold above
final list price
25.5%
-3.3 ppts
2.5 ppts
Average
sale-to-final-list-price ratio
98.6%
-0.4 ppts
0.5 ppts
Pending sales that fell out of
contract, as % of overall pending sales
16.2%
-0.1 ppts
0.7 ppts
Average 30-year fixed mortgage
rate
6.82%
-0.63 ppts
0.45 ppts
Metro-Level Highlights: December 2023
- Pending sales: In New Orleans, pending sales rose 40.3%
year over year, more than any other metro Redfin analyzed. Next
came McAllen, TX (31.8%) and Dallas (25.7%). Pending sales fell
most in Honolulu (-27.3%), Knoxville, TN (-24.2%) and Greensboro,
NC (-22.8%).
- Closed sales: Closed sales rose in just six metros, with
the biggest increases in North Port, FL (7.1% YoY), Las Vegas
(4.6%) and Salt Lake City (4.4%). Closed sales fell fastest in
Tacoma, WA (-23%), Boston (-19.4%) and Frederick, MD (-18.6%).
- Prices: Median sale prices rose most from a year earlier
in Anaheim, CA (17.6%), Camden, NJ (16.1%) and Rochester, NY (16%).
They fell in 10 metros, with the biggest declines in New Orleans
(-5.4%), Charlotte, NC (-2.6%) and Austin (-2.4%).
- New listings: New listings rose most from a year earlier
in Salt Lake City (22.3%), Memphis, TN (18.4%) and McAllen (16.6%).
They fell most in San Francisco (-30.8%), Atlanta (-17.6%) and
Indianapolis (-15.4%).
- Overall supply: Active listings increased fastest in
Cape Coral, FL (53.7% YoY), North Port (40.7%) and New Orleans
(26%). They decreased fastest in Las Vegas (-31%), New Brunswick,
NJ (-25.4%) and Anaheim (-24.6%).
- Competition: In Rochester, 65.3% of homes sold above
their final list price, the highest share among the metros Redfin
analyzed. Next came Newark, NJ (61.3%) and Buffalo, NY (61.2%). The
shares were lowest in West Palm Beach, FL (8.6%), Cape Coral (9.4%)
and Austin (9.4%).
- Speed: In Rochester, 61% of homes that went under
contract did so within two weeks—the highest share among the metros
Redfin analyzed. Next came Grand Rapids, MI (48.5%) and Cincinnati
(46.6%). The lowest shares were in Honolulu (2.4%), Knoxville (6%)
and Lake County, IL (8.8%).
To view the full report, including charts, please visit:
https://www.redfin.com/news/housing-market-tracker-december-2023
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate
company. We help people find a place to live with brokerage,
rentals, lending, title insurance, and renovations services. We
also run the country's #1 real estate brokerage site. Our
home-buying customers see homes first with same day tours, and our
lending and title services help them close quickly. Customers
selling a home in certain markets can have our renovations crew fix
up their home to sell for top dollar. Our rentals business empowers
millions nationwide to find apartments and houses for rent.
Customers who buy and sell with Redfin pay a 1% listing fee,
subject to minimums, less than half of what brokerages commonly
charge. Since launching in 2006, we've saved customers more than
$1.5 billion in commissions. We serve more than 100 markets across
the U.S. and Canada and employ over 4,000 people.
For more information or to contact a local Redfin real estate
agent, visit www.redfin.com. To learn about housing market trends
and download data, visit the Redfin Data Center. To be added to
Redfin's press release distribution list, email press@redfin.com.
To view Redfin's press center, click here.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240119495504/en/
Contact Redfin Redfin Journalist Services: Ally Braun,
206-588-6863 press@redfin.com
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