Mortgage applications and Redfin’s demand index are up as mortgage rates continue to come down.
Pending home sales declined and the number of homes on the market increased as buyers took a break over Thanksgiving, according to Redfin.
Daily rates dipped to 6.29 percent on Dec. 1, down one full percentage point from a peak of 7.29 one month earlier. Mortgage-purchase applications are up 4 percent from the end of November, and Redfin’s Homebuyer Demand Index is up about 1.5 percent from early November.
Price drops seem to be less common with mortgage rates now in the 6.5 percent range. Just over 6 percent of homes for sale each week during the four weeks ending Nov. 27 on average had a price drop, down sharply from 7.2 percent a week earlier and the lowest level since July, data shows.
“There have been a handful of pieces of relatively good news for the housing market lately, but we’re far from out of the woods,” said Redfin Deputy Chief Economist Taylor Marr in a release. “Key indicators of homebuying demand will likely be teetering on a knife’s edge with every data release that comes out related to the Fed’s path to eventually bringing rates down. We’re likely past peak inflation, past peak mortgage rates and past the bottom for mortgage purchase applications. But there’s further cooling ahead for the housing market, as sales and prices have further to fall before buyers and sellers become comfortable with homebuying costs again.”
Months of supply hit 4.1 during the four weeks ending Nov. 27, up sharply from the prior four-week period and the highest level since May 2020.
The supply of homes for sale posted its biggest year-over-year increase on record even as new listings declined by double digits, indicating homes lingered on the market over Thanksgiving week, Redfin reporting shows.
New data also points to prices falling compared with last year in 10 of the 50 most populous metros.
Prices fell 8.2 percent year-over-year in San Francisco, 2.8 percent in San Jose, Calif., 2.7 in Pittsburgh, 2.3 in Detroit, 1.7 in Sacramento, Calif., and 1.3 in Austin, Texas. They declined less than 1 percent in Chicago, San Diego, Los Angeles and Philadelphia.
This marks the first time Austin and Los Angeles home prices have fallen on a year-over-year basis since mid-2019. It’s the first time Chicago prices have fallen since June 2020.
Redfin’s leading indicators of homebuying activity include:
• For the week ending Dec. 1, 30-year mortgage rates ticked down to 6.49 percent. The daily average dipped to 6.29 on Dec. 1, down one full percentage point from the peak of 7.29 reached on Nov. 4.
• Mortgage purchase applications during the week ending Nov. 25 increased 4 percent from a week earlier, seasonally adjusted for Thanksgiving effects. Purchase applications were down 41 percent from a year earlier.
• Fewer people searched for “homes for sale” on Google than this time in 2021. Searches during the week ending Nov. 26 were down about 40 percent from a year earlier.
• The seasonally adjusted Redfin Homebuyer Demand Index was up 1.5 percent from a month earlier but down 20 percent from a year earlier during the four weeks ending Nov. 27.
• Touring activity as of Nov. 27 was down 53 percent from the start of 2022, compared with a 37 percent decrease at the same time last year, according to home tour technology company ShowingTime. Touring activity declined less during this year’s Thanksgiving week than it has in past years.
Key housing market takeaways for 400-plus U.S. metro areas:
Unless otherwise noted, this data covers the four-week period ending Nov. 27. Redfin’s weekly housing market data goes back through 2015.
• The median home sale price was $357,073, up slightly from the week before and up 2.4 percent year-over-year.
• Among the 50 most populous U.S. metros, pending sales fell the most from a year earlier in Las Vegas (-65 percent), Phoenix, (-59.7), Austin, Texas (-57.1), Jacksonville, Fla. (-54.5) and Sacramento, Calif. (-54.2).
• The median asking price of newly listed homes was $359,725, up 4.8 percent year-over-year, one of the slowest growth rates since the beginning of the pandemic.
• The monthly mortgage payment on the median-asking-price home was $2,342 at the current 6.49 percent mortgage rate. That’s down slightly from a week earlier and down 8 percent from three weeks earlier, when mortgage rates were at 7.08 percent. Still, monthly mortgage payments are up 40 percent from a year ago.
• Pending home sales were down 35.5 percent year-over-year, the largest decline since at least January 2015, as far back as Redfin’s data goes.
• New listings of homes for sale were down 21 percent from a year earlier, the largest decline since May 2020.
• Active listings were up 12.9 percent from a year earlier, the biggest annual increase since at least 2015.
• 32 percent of homes that went under contract had an accepted offer within the first two weeks on the market, little changed from the prior four-week period but down from 40 percent a year earlier.
• Homes that sold were on the market for a median of 36 days, up more than a week from 28 days a year earlier and up from the record low of 17 days set in May and early June.
• 26 percent of homes sold above their final list price, down from 42 percent year-over-year and the lowest level since June 2020.
• On average, 6.3 percent of homes for sale each week had a price drop, down sharply from 7.2 percent a week earlier but up from 2.9 a year earlier.
• The average sale-to-list price ratio fell to 98.4 percent from 100.3 a year earlier. That’s the lowest level since June 2020.