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Pending Home Sales Post Biggest Increase Since 2021

Written by Posted On Thursday, 10 October 2024 06:27
Pending Home Sales Post Biggest Increase Since 2021

Home sales are rising in most major U.S. metros as housing payments sit near their lowest level since January, but they’re falling in coastal Florida as hurricanes hit the southeastern U.S. Mortgage rates rebounded over the weekend; that could soon begin to impact homebuyer demand.

Pending U.S. home sales rose 2% from a year earlier during the four weeks ending October 6, the biggest increase in three years, according to a new report from Redfin, the technology-powered real estate brokerage.

Demand picked up at earlier stages of the homebuying process, too. Redfin’s Homebuyer Demand Index–a measure of tours and other buying services from Redfin agents–sat near its highest level since May last week, and mortgage-purchase applications are up 8% month over month. New listings are also rising, with a 5.7% year-over-year uptick. But unlike the increase in pending sales, that’s a continuation of a trend; new listings have been increasing for nearly a year.

Pending sales improved because buyers came out of the woodwork in late September after the Fed’s interest-rate cut, even though mortgage rates had already been declining for several weeks in anticipation of the cut. Falling mortgage rates have pushed the typical homebuyer’s housing payment down to $2,526, near its lowest level since January and down 5.8% year over year. It’s worth noting that this compares to a period last year when sales waned as mortgage rates surged to 7.5%.

Mortgage rates jumped over the weekend, which could deter some buyers in the coming weeks

The improvement in sales may slow in the coming weeks, as mortgage rates started rising last Friday after a surprisingly strong jobs report. Daily average mortgage rates jumped to 6.62% on Monday from 6.26% last Thursday. Some buyers may back off due to rising rates, but not all of them: Mortgage rates are still significantly lower than they were a year ago–and lower than earlier this year–and the Fed is on track to continue cutting interest rates.

“House hunters are monitoring mortgage rates closely, but so far, the increase in rates isn’t slowing buyers down. The home I listed on Thursday got a lot of traffic over the weekend and received 10 offers,” said Shoshana Godwin, a Redfin Premier agent in Seattle. “I’m advising buyers to make an offer if they love a home; don’t try to time the market. Rates have swung down and then up over the last few weeks, and we don’t know exactly what will happen in the next few weeks. A buyer may lock in a slightly higher rate now than they would have two weeks ago, but if they wait, it’s possible rates will increase more. It’s also possible rates drop more significantly, which could heat up competition.”

Sales are falling in coastal Florida, partly due to Hurricane Helene

Pending home sales are rising in most major metros, but they’re falling in some places, most notably Florida. In West Palm Beach, pending sales fell 17.6%, the biggest decline of the 50 most populous U.S. metros, followed closely by Tampa (-15.5%) and Miami (-14.8%). That’s due partly to Hurricane Helene, but coastal Florida’s housing market has been slowing over the last several months as insurance and HOA costs surge due to the increasing prevalence of climate disasters.

Hurricane Helene–and Hurricane Milton, which hit just days later–may have a bigger impact on future home sales; a recent Redfin survey found that nearly one-third of young adults are reconsidering where they want to move after seeing or hearing about damage caused by the hurricane.

For Redfin economists’ takes on the housing market, please visit Redfin’s “From Our Economists” page.

Indicators of homebuying demand and activity
 

Value (if applicable)

Recent change

Year-over-year change

Source

Daily average 30-year fixed mortgage rate

6.61% (Oct. 9)

Up from 6.11% 3 weeks earlier

Down from 7.7%

Mortgage News Daily

Weekly average 30-year fixed mortgage rate

6.12% (week ending Oct. 3)

Up from 2-year low of 6.08% a week earlier

Down from 7.49%

Freddie Mac

Mortgage-purchase applications (seasonally adjusted)

  

Essentially unchanged from a week earlier (as of week ending Oct. 4)

Up 8%

Mortgage Bankers Association

Redfin Homebuyer Demand Index (seasonally adjusted)

  

Near highest level since May; up 5% from a month earlier

(as of week ending Oct. 6)

Up 2%

Biggest increase in about a year

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

Touring activity

  

Down 8% from the start of the year (as of Oct. 6)

At this time last year, it was down 9% from the start of 2023

ShowingTime, a home touring technology company

Google searches for “home for sale”

  

Down 2% from a month earlier (as of Oct. 6)

Down 11%

Google Trends

Key housing-market data

U.S. highlights: Four weeks ending Oct. 6, 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 Oct. 6, 2024

Year-over-year change

Notes

Median sale price

$383,225

4%

  

Median asking price

$399,925

5.7%

Biggest increase in 2 years

Median monthly mortgage payment

$2,526 at a 6.12% mortgage rate

-5.8%

Near lowest level since January

Nearly $300 below April’s all-time high

Pending sales

77,951

2%

Biggest increase in nearly 3 years

New listings

89,388

5.7%

  

Active listings

1,041,247

18%

Smallest increase since April

Months of supply

3.9

+0.7 pts.

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

34.2%

Down from 40%

  

Median days on market

39

+7 days

  

Share of homes sold above list price

26.1%

Down from 31%

  

Average sale-to-list price ratio

98.8%

-0.4 pts.

  

Metro-level highlights: Four weeks ending Oct. 6, 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

Newark, NJ (11.4%)

Nassau County, NY (11.1%)

Milwaukee (10%)

Chicago (9.7%)

Cleveland (9.7%)

Austin, TX (-4.8%)

Tampa, FL (-2.1%)

San Antonio (-2%)

Oakland, CA (-1.9%)

Fort Worth, TX (-0.6%)

Declined in 5 metros

Pending sales

Phoenix (14.1%)

Seattle (12.3%)

San Jose, CA (11.6%)

San Antonio (11.6%)

Virginia Beach, VA (11.2%)

West Palm Beach, FL (-17.6%)

Tampa, FL (-15.5%)

Miami (-14.8%)

Fort Lauderdale, FL (-12.8%)

Atlanta (-12.5%)

Increased in 32 metros

New listings

San Jose, CA (24.8%)

Phoenix (21.6%)

New Brunswick, NJ (19.9%)

Seattle (18.5%)

Baltimore, MD (17.2%)

Atlanta (-18.1%)

Tampa, FL (-16.7%)

San Antonio (-12.9%)

West Palm Beach, FL (-8.2%)

Austin, TX (-5.6%)

Declined in 9 metros

To view the full report, including charts, please visit:
https://www.redfin.com/news/housing-market-update-pending-home-sales-increase

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Redfin is a technology-driven real estate company with the country's most-visited real estate brokerage website. As part of Rocket Companies (NYSE: RKT), Redfin is creating an integrated homeownership platform from search to close to make the dream of homeownership more affordable and accessible for everyone. Redfin’s clients can see homes first with on-demand tours, easily apply for a home loan with Rocket Mortgage, and save thousands in fees while working with a top local agent. You can find more information about Redfin and get the latest housing market data and research at Redfin.com/news. For more information about Rocket Companies, visit RocketCompanies.com.

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