Redfin: Pending home sales at highest level in a year

U.S. pending home sales rose 1 percent month-over-month in October to the highest level in a year on a seasonally adjusted basis, according to a new report from Redfin.

They fell 4.8 percent from a year earlier, but that’s the smallest annual decline in almost two years.

Redfin said pending sales have been ticking up for several reasons:

• The supply crunch has eased slightly, giving buyers more options to choose from. The more homes there are on the market, the more can sell. New listings in October were comparable with September’s level, which was the highest in six months on a seasonally adjusted basis. They fell 4.5 percent from a year earlier, but that’s the smallest decline since summer 2022. Active listings, the total number of homes for sale, rose 1.4 percent month-over-month to the highest level since May and were down 12.5 percent from a year earlier—the smallest decline in four months.
• Sellers are cutting prices and offering concessions to entice buyers. Roughly 1 in 5 (20.8 percent) homes that sold in October had a price drop, just shy of the 21.6 percent record high hit a year earlier. More than one-third of sellers are offering concessions, which can include money for repairs, closing costs and/or mortgage-rate buydowns.
• People have to move, even when it’s expensive to do so. Many house hunters have been on the sidelines for months, waiting for mortgage rates and prices to drop. But not everyone can wait forever; major life events like divorce and new jobs are bringing some buyers back to the market. And other buyers are jumping in because they want to relocate to somewhere more affordable.
• Mortgage rates fell slightly at the end of October, which could have contributed to the uptick in pending sales as buyers went to lock in lower borrowing costs. Rates have fallen further this month, which means pending sales may post a bigger increase in November.

“I’ve had a lot of sellers reach out to me recently saying they’re ready to list their homes—a reversal from recent months,” Heather Mahmood-Corley, a Redfin Premier real estate agent in Phoenix, said in a release. “Everyone has a different reason for relocating. One of my sellers is moving because she wants to buy her father’s house and he’s giving her a deal, which helps offset the higher mortgage rate she’ll take on. Another is moving to Florida with her sister because her husband passed away; she built up a lot of equity, so is able to pay in cash. Other people are selling because they want to live somewhere more affordable.”