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More homebuyers are coming off the sidelines — and sellers are welcoming them, according to on-the-ground data from agents released Thursday by Redfin.
Homebuyer demand is continuing to tick upwards from its lows last fall, and sellers are responding in part — even as mortgage rates increased modestly this week, Redfin data shows.
Pending home sales posted their smallest monthly decline since September during the four-week period ending Feb. 5, while falling 20 percent from a year earlier. Mortgage purchase applications for the week ending Feb. 3 increased 3 percent from a week earlier but were down 37 percent from a year earlier.
Earlier this week, the Redfin Homebuyer Demand Index, the brokerage’s in-house gauge of buyer activity, hit its highest level since September, rising 21 percent from an October low but down 25 percent from the same period last year.
And while mortgage rates ticked up this week, they’re still down a full percentage point from a late 2022 peak. The average 30-year fixed mortgage rate was 6.12 percent for the week ending Feb. 9. In November, the average rate hit a peak of 7.08 percent.
Rates and home prices coming down from their respective peaks is attributed as the main reason for buyers reentering the market.
“By Super Bowl weekend, we usually have a good idea how a given year’s housing market will play out. But this year is anything but typical,” Redfin Economics Research Lead Chen Zhao said in a statement.
“This year is more uncertain than most because the effects of last year’s rapid rate hikes are still flowing through the economy, and we’re not sure how much more the Fed will raise rates this year,” she added. “So even after the Super Bowl comes and goes, we’ll be closely monitoring the Fed’s words and actions, along with inflation rates and indicators about the health of the labor market for signals that could affect homebuyer demand.”
