Buyer confidence improves with dropping rates and post-election stability
Homebuying demand is approaching its highest levels since early spring as mortgage rates retreat from a four-month peak, according to Redfin’s latest report.
Indicators such as home tours, mortgage applications, and pending sales have shown significant increases, reflecting a shift in buyer activity.
The average 30-year fixed mortgage rate fell to 6.69%, down from 6.84% just two weeks ago. This decline followed a jobs report that suggested the Federal Reserve may cut rates again this month. As a result, the typical US homebuyer’s monthly housing payment has dropped to $2,527, the lowest in over two months.
Redfin’s Homebuyer Demand Index, a seasonally adjusted measure of buyer activity through Redfin agents, increased 8% year-over-year, nearing its highest point since April. Mortgage-purchase applications surged nearly 20% from the previous month, while pending home sales rose by 4.1% year-over-year during the four weeks ending December 8.
According to Redfin, the financial uncertainty surrounding the presidential election has passed, and buyers have accepted that mortgage rates are likely to remain above 6% for the foreseeable future.
“This week’s data shows the increase in signals like home tours and mortgage applications from the last month is continuing,” said Chen Zhao, economic research lead at Redfin. “The recent decline in mortgage rates isn’t pushing demand to new heights.”
Sellers appear to be responding to the same factors influencing buyers, with many listing properties to capitalize on heightened demand. New listings have risen by 7.9% year-over-year, marking the most significant increase since June (aside from a Thanksgiving-related jump in late November).
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“Rather, demand is settling into its new, post-election normal. In the months leading up to the election, house hunters were hibernating; demand was slower than we would have expected, even with high mortgage rates. Now, early-stage demand has jumped up to where we’d expect it to be,” Zhao added.
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