Pending home sales fell 0.3 percent from a year earlier during the four weeks ending Nov. 9, the first decrease in four months, according to a report from Redfin.
Homes are taking a median of 49 days to go under contract, the longest span for this time of year since 2019, Redfin reported.
House hunters are hesitant because costs are high and the economy is uncertain, according to Redfin:
- The weekly average mortgage rate rose to 6.22 percent after dropping to a year-low of 6.17 percent a week earlier after the Fed indicated it may not cut interest rates in December;
- The median home-sale price increased 2.4 percent year-over-year, the biggest jump in six months; and
- Many would-be buyers are wary of purchasing a home while the economy feels unstable. More than 20 percent of Americans delayed a major purchase like a home or car due to the government shutdown, and another 15 percent canceled a major purchase altogether, per a recent Redfin survey.
The selling side is holding up better, with hundreds of thousands more sellers than buyers in the market nationwide. Redfin agents recommend sellers price their home realistically from the start to attract buyers. This week, new listings of homes for sale are up 3.4 percent year-over-year, similar to the increases Redfin has seen over the last month.
Agents also report that some would-be buyers are waiting for mortgage rates to dip below 6 percent before making a move.
“House hunters are sensitive to rates and prices; many are waiting for one or both to drop before buying,” Milwaukee-based Redfin Premier agent W.J. Eulberg said in a release. “But that’s not always a great strategy. If mortgage rates come down significantly, there will be more bidding wars. And if prices drop, it will probably be because the economy has weakened and people are losing their jobs. For people who can afford a home now, they may consider jumping into the market while competition is low and many sellers are willing to negotiate on price or offer concessions like funds to cover closing costs.”