New listings of U.S. homes for sale rose 13 percent year-over-year during the four weeks ending Feb. 25, the biggest increase in nearly three years, according to a new report from Redfin.
Total inventory is also improving. Active listings are flat from a year ago, marking the first time in nine months the total number of homes for sale hasn’t declined.
That’s welcome news for homebuyers, who have been battling the dual challenges of low inventory and high mortgage rates for over a year. But while today’s buyers have a few more homes to choose from, they’re still facing historically high housing costs. The typical homebuyer’s mortgage payment is $2,671, just $47 shy of last October’s record high.
“House hunters are out there, and competition picks up every time mortgage rates decline a bit,” Brynn Rea, a Redfin Premier agent in Spokane, Wash., said in a release. “I’m telling buyers who can afford it to look now while they have more breathing room and less competition. They have a good chance of negotiating the price down or getting some concessions from the seller, which could make up for getting a 7 percent mortgage rate instead of 6 percent.”
High costs pushed pending sales down 8 percent in mid- to late-February, the biggest decline in five months, and mortgage-purchase applications declined for the fourth straight week. However, more house hunters are searching as more homes hit the market. Redfin’s Homebuyer Demand Index is up 10 percent from a month ago to its highest level since last September. Pending sales could improve in the next few months if rates don’t increase further and new listings continue to rise, according to Redfin.