On a local level, sales are increasing in most major metros. Other demand indicators, like requests for home tours and mortgage-rate locks, are also improving as mortgage rates drop to their lowest level in two years
Pending U.S. home sales were flat from a year earlier during the four weeks ending September 29, marking the first time since January pending sales didn’t decline. That’s according to a new report from Redfin, the technology-powered real estate brokerage. It’s worth noting that we’re comparing to a period last year when sales slumped as mortgage rates surged into the mid-7% range.
Pending sales increased year over year in 27 of the 50 most populous U.S. metros, the most since January. They rose most in Phoenix, with a 13% increase, followed by San Jose, CA (12%) and Portland, OR (10%). Home buying demand is starting to improve in those places after dropping to a low point last year, but pending sales are still below pre-pandemic levels. (Sales are still posting big declines in Florida, where homebuyers have backed away due largely to climate disasters and rising insurance and HOA costs. Pending sales fell 18% year over year in West Palm Beach, more than anywhere else in the country, followed by 16% drops in Fort Lauderdale and Miami.)
Homebuying demand at earlier parts of the buying process is improving, too. Redfin’s Homebuyer Demand Index – a measure of tours and other buying services from Redfin agents – is up 9% month over month to its highest level since April. Homebuyers locked in more than twice as many mortgages than they did a month earlier on September 30, according to Optimal Blue data, and mortgage-purchase applications are up 10% month over month.
Homebuyers are starting to return because housing costs are coming down. The average 30-year mortgage rate dropped to 6.08% last week, its lowest level in two years, pushing the typical homebuyer’s mortgage payment down to $2,529, near its lowest level since January. That’s a 5.9% decline, the biggest year-over-year drop since May 2020. Additionally, the Fed’s mid-September interest-rate cut caused many Americans to realize that mortgage rates have already declined about as much as they’re going to for the foreseeable future.
Declining mortgage rates are also encouraging some homeowners to sell, though that’s not a new trend: Listings have been on the rise for nearly a year, and this week’s 4.3% increase is on par with those over the last few months.
“There’s no doubt demand has picked up since the Fed’s interest-rate cut; I’m seeing much more traffic at my listings. But even though homes are selling, they’re still not typically getting multiple offers,” said Max Shadle, a Redfin Premier agent in Phoenix. “Falling rates are an incentive for homeowners to sell, too, because they know demand is coming back and they feel less locked in by their relatively low rate. But many people still have an ultra-low mortgage rate from a few years ago, and they’re not quite ready to let go.”
For Redfin economists’ takes on the housing market, please visit Redfin’s “From Our Economists” page.
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Indicators of homebuying demand and activity |
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Value (if applicable) |
Recent change |
Year-over-year change |
Source |
|
|
Daily average 30-year fixed mortgage rate |
6.25% (Oct. 2) |
Up from 6.11% two weeks earlier, but still near lowest level since February 2023 |
Down from 7.61% |
Mortgage News Daily |
|
Weekly average 30-year fixed mortgage rate |
6.08% (week ending Sept. 26) |
Lowest level in 2 years |
Down from 7.31% |
Freddie Mac |
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Mortgage-purchase applications (seasonally adjusted) |
Increased 1% from a week earlier (as of week ending Sept. 27) |
Up 9% |
Mortgage Bankers Association |
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Redfin Homebuyer Demand Index (seasonally adjusted) |
Highest level since April; up 9% from a month earlier (as of week ending Sept. 29) |
Up 2% Biggest increase in over a year |
Redfin Homebuyer Demand Index a measure of tours and other homebuying services from Redfin agents |
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Touring activity |
Up 2% from the start of the year (as of Sept. 29) |
At this time last year, it was down 8% from the start of 2023 |
ShowingTime, a home touring technology company |
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Google searches for “home for sale” |
Down 6% from a month earlier (as of Sept. 30) |
Down 8% |
Google Trends |
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Key housing-market data
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U.S. highlights: Four weeks ending Sept. 29, 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. |
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Four weeks ending Sept. 29, 2024 |
Year-over-year change |
Notes |
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Median sale price |
$383,375 |
4% |
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Median asking price |
$401,700 |
5.3% |
Biggest increase since February |
|
Median monthly mortgage payment |
$2,529 at a 6.08% mortgage rate |
-5.9% |
Biggest decline since May 2020 Near lowest level since January Nearly $300 below April’s all-time high |
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Pending sales |
76,034 |
unchanged |
First time since January pending sales haven’t posted a decline |
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New listings |
88,254 |
4.3% |
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|
Active listings |
1,010,788 |
16.6% |
Smallest increase since April |
|
Months of supply |
4.2 |
+0.9 pts. |
Highest level since February 4 to 5 months of supply is considered balanced, with a lower number indicating seller’s market conditions. |
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Share of homes off market in two weeks |
34.2% |
Down from 39% |
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Median days on market |
39 |
+7 days |
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Share of homes sold above list price |
26.7% |
Down from 31% |
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Average sale-to-list price ratio |
98.9% |
-0.4 pts. |
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Metro-level highlights: Four weeks ending Sept. 29, 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. |
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Metros with biggest year-over-year increases |
Metros with biggest year-over-year decreases |
Notes |
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Median sale price |
Newark, NJ (13.6%) Nassau County, NY (10.5%) Providence, RI (9.8%) Cincinnati (9.1%) Montgomery County, PA (9.1%) |
Austin, TX (-4.9%) Tampa, FL (-2.1%) Fort Worth, TX (-1.6%) Denver (-1.5%) Dallas (-1.5%) Oakland, CA (-0.5%) San Antonio (-0.1%) |
Declined in 7 metros |
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Pending sales |
Phoenix (12.9%) San Jose, CA (12.4%) Portland, OR (9.6%) Boston (9.5%) Seattle (7.7%) |
West Palm Beach, FL (-17.7%) Fort Lauderdale, FL (-16.4%) Miami (-16.2%) Tampa, FL (-13.4%) New Brunswick, NJ (-13.1%) |
Increased in 27 metros |
|
New listings |
San Jose, CA (25.9%) Phoenix (20.9%) New York (17.4%) New Brunswick, NJ (16.6%) Boston (15.7%) |
San Antonio (-18.6%) Atlanta (-17%) Tampa, FL (-16.6%) Anaheim, CA (-15.9%) Los Angeles (-8.4%) |
Declined in 13 metros |
To view the full report, including charts, please visit:
https://www.redfin.com/news/housing-market-update-pending-home-sales-demand-improving
