New listings of homes for sale rose about 1 percent from a year earlier during the four weeks ending Jan. 25, the first increase in more than two months, according to a report from Redfin.
There are a few reasons new listings are starting to improve:
- Homebuying demand is improving. Pending home sales fell 1.6 percent year-over-year, the smallest decline in nearly two months, and mortgage-purchase applications are sitting near their highest level in three years. Some house hunters are coming out of the woodwork because housing costs are declining — the median monthly housing payment is down 6.6 percent from a year ago — and sellers are taking notice of the uptick in demand.
- Mortgage rates are declining. The weekly average mortgage rate is 6.09 percent, up slightly from last week but still near the lowest level in three years. In addition to attracting some house hunters, lower rates are easing the mortgage rate lock-in effect and motivating some homeowners to sell.
While slightly more sellers and buyers are coming off the sidelines, homes are still taking a long time to sell. The typical home that sold in January took 63 days to go under contract—a week longer than last year and the longest span in six years. House hunters are able to take their time because it’s a buyer’s market, with hundreds of thousands more home sellers than buyers.
“Buyers are more serious than they were a few months ago; they’re looking at every listing and meticulously comparing the pros and cons of each one,” Connie Durnal, a Redfin Premier agent in Dallas, said in a release. “Buyers are able to take their time and be picky because there are a lot of listings; bidding wars are few and far between. Sellers who need to move know they need to be realistic; some are willing to negotiate prices down and make concessions like repairs, especially because they’re competing with builders of new construction.”