Dampened growth attributed to several factors
In January 2024, the housing market in the US experienced a slight downturn in new listings, with a 1.2% decrease compared to the previous month on a seasonally adjusted basis, as reported by Redfin. This decline, the first since June, contrasts with a 2.7% increase compared to the same period last year, a notable slowdown from December’s 4.2% gain.
Active listings, representing the total number of homes available for sale, also saw a dip, falling by 0.3% from the previous month on a seasonally adjusted basis. This marks the first decline in six months and a 4.4% decrease year over year.
Pending home sales, while still showing growth, experienced a notable deceleration in January, the report said. The rise of 1.1% from the previous month on a seasonally adjusted basis pales in comparison to December’s 5.1% jump. However, it reflects an 8.8% increase from the same period last year.
The report further noted that stagnant mortgage rates played a significant role in dampening market activity last month, remaining steady at 6.6% throughout January. This lack of movement follows a period where rates saw their most substantial drop since 2008. Homeowners, benefiting from lower rates, are reluctant to sell, fearing higher rates upon purchasing a new home.
Hal Bennett, a Redfin Premier real estate agent, noted that potential buyers and sellers closely monitor the Federal Reserve’s announcements. Buyers and sellers came off the sidelines in December when the Fed signaled it would lower interest rates three times in the next year, but now some are getting cold feet because the Fed indicated that “rate cuts may come later than expected,” said Bennett. “Inflation and geopolitical conflicts are also scaring some buyers. April, at the absolutely earliest, is when I think things could take off.”
Home prices reaching a record high
The report suggested the slight cooldown of the housing market in January could also be attributed to harsh winter conditions across the country and rising housing costs.
The median home sale price in the United States saw a notable increase of 5.2% year over year, reaching $402,343 in January—the largest jump since September 2022. However, prices remained relatively unchanged from the previous month.
The report added that the persistent shortage of homes for sale continues to be the primary driver of price growth, with both new listings and active listings remaining well below pre-pandemic levels.
Key highlights for January 2024 in the US:
- Median sale price: $402,343, a 5.2% increase year over year.
- Pending sales: 1.1% rise month over month, an 8.8% increase year over year.
- New listings: 1.2% decrease month over month, a 2.7% increase year over year.
- Active listings: 0.3% decrease month over month, a 4.4% decrease year over year.
For detailed insights and charts, refer to the full report on Redfin’s website.
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