The growth comes after nearly a year of a waiting market
The housing market saw new listings and pending homes sales climb to the highest level in roughly a year in November with a market seemingly fed up with waiting and finally seeing declines in mortgage rates. Home prices also saw the biggest year-over-year increase since late 2022.
Redfin, a real estate brokerage, released a report detailing the current state of the housing market.
“Buyers and sellers are learning to live with uncertainty,” said Shay Stein, a Redfin premier real estate agent.
“They’ve realized no-one has a crystal ball that can predict exactly when mortgage rates will fall back to 5%, so they’re making moves now because they can only wait so long to be near their grandkids, live in an RV like they’ve always dreamt of, or finalize their divorce,” she added.
What did the report find?
Redfin’s report found that new listings rose 1.3% month over month to the highest level since October 2022 on a seasonally adjusted basis. They also increased by 0.1% year-over-year. Active listings also grew 3.9% month-over-month, which was the biggest increase seen since July 2022.
The average 30-year fixed mortgage rate saw a decline every week in November, ending at 7.22% and currently standing at 6.95%. Stein said that falling mortgage rates in recent weeks has motivated buyers.
“In many cases, their monthly payment is $200 less than it would’ve been had they locked in a rate three weeks ago when they started looking,” explained Stein.
Pending home sales saw a 2% increase in November which was the highest level in a year on a seasonally adjusted basis. It only decreased by 0.1% year-over-year.
“A year ago, sellers had trouble understanding why they weren’t getting $20,000 over the list price like their neighbor did during the pandemic homebuying boom. Now, they understand that to sell their home, they need to price it fairly and, in some cases, offer the buyer concessions like money toward closing costs or mortgage-rate buydowns,” said Stein.
In November, the median US home sale price was $408,732, a 3.7% increase year-over-year and a 1.1% decrease month-over-month. Annual home price growth reverted back to the 2-7% range that it had previously been at prior to the pandemic. Buyers competing for a limited supply of homes has partially contributed to the rise in prices.
Closed sales only saw a 0.2% increase on a seasonally adjusted basis month-over-month and fell 5.4% year-over-year, partly because of deals falling through at the last minute. Around 45,000 US home-purchase agreements were canceled in November, which equated to 16.9% of homes going under contract.
“While some buyers and sellers have come to terms with today’s economic uncertainty, that same uncertainty is causing many of them to get cold feet,” said Stein, noting that housing affordability continues to be strained.
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