Pending home sales fell 2.4 percent year-over-year during the four weeks ending April 5, the biggest decline in three months. That’s according to a new report from Redfin.
Sales fell most in Providence, R.I. (-15.5 percent), Houston (-15.4 percent) and New York (-15.3 percent). They increased most in West Palm Beach, Fla. (20.9 percent), San Francisco (16.7 percent) and San Jose, Calif. (11.4 percent).
Homes are selling slowly, too: The typical home that went under contract did so in 51 days nationwide, the longest span for this time of year since 2019.
Homebuyers are backing off for a few reasons:
- Rising mortgage rates. The weekly average mortgage rate jumped to 6.46 percent, the highest level since September.
- Rising prices. Home-sale prices rose 2.2 percent annually, the biggest increase in a year. Together with increasing rates, that has pushed the median monthly mortgage payment to $2,750, up slightly (0.2 percent) from a year earlier.
- The Iran war. The war and the turmoil it’s causing in the markets are the reason mortgage rates are rising. The war is also contributing to widespread economic uncertainty, sidelining many would-be homebuyers. The ceasefire that was recently announced sent oil prices down and rallied markets, and it could help bring mortgage rates back down into the low-6 percent range.
- Easter effect. House hunters took a break over Easter weekend, which fell during this four-week period but not during last year’s comparable period.
On the selling side, new listings dipped 2.6 percent year-over-year, the biggest decline in a month, also partly due to the impact of Easter weekend. New listings dropped most in Tampa, Fla. (-17.2 percent), Providence (-16.6 percent) and Miami (-13.5 percent). They increased in five metro areas: San Jose (14.4 percent), Philadelphia (8 percent), Milwaukee (7.6 percent), Cincinnati (1.2 percent) and Baltimore (0.6 percent).
While new listings are losing steam, it’s still a strong buyer’s market almost everywhere in the country, according to Redfin.
“There are more homes on the market than there are buyers, so sellers need to make sure their house stands out,” Jesse Landin, a Redfin Premier agent in San Antonio, said in a release. "The most important day is picture day — that determines whether house hunters will actually walk through your home. Paint the walls, make small repairs, and, if you can afford it and your local agent agrees it’s worthwhile, make bigger repairs. Your agent should also hire the right media group for photography and video; pictures taken with a phone just don’t cut it anymore. And make sure you hire an agent with a clear, specific plan for your home, not just a generic approach. That’s what I do — I have a plan for each home. Buyers making large down payments and taking on high monthly payments want a home that’s as close to perfect as possible, because they have more choices in the market.”