Listings growth slows, buyer demand subdued, but could prices soften soon?
The growth in new home listings slowed during the final week of March, a trend likely influenced by the Easter holiday. However, Redfin economists suggest that buyers could see some relief from high housing costs in the coming months.
New listings of US homes for sale rose 8.4% compared to the same period last year in the four weeks ending March 31. This represents the smallest increase in approximately seven weeks.
Analysts attribute the slowdown to sellers taking a pause during the Easter holiday, which fell a week earlier in 2024 than last year. While likely a temporary dip, Redfin said it will carefully monitor listing data in the coming weeks to identify any broader trends.
Homebuying demand also showed signs of softening. Home tours were up 15% compared to the start of the year, a slower increase than the 21% seen at the same time in 2023. Mortgage purchase applications remained flat for the week.
Additionally, pending home sales dropped 2.8% year-over-year and unexpectedly declined during the last week of March. Some potential buyers likely took a break due to the holiday, while others continue to be deterred by high housing costs.
The median US home sale price reached $376,223, a 4.7% increase from the previous year. Median monthly housing payments neared an all-time high last October when home prices were lower, but mortgage rates surpassed 7%.
However, Redfin economic research lead Chen Zhao said buyers could see some relief on housing costs in the coming months.
“Buyers may get a break on housing costs in the coming months,” Zhao said in the report. “Daily average mortgage rates rose this week because of some disappointing economic news. However, if the upcoming job and inflation reports show that the economy is heading in the right direction, the Fed is likely to confirm they will cut interest rates in June, which would lower mortgage rates. Home-price growth could soften as spring goes on if new listings regain the momentum we saw before Easter.”
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