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The housing market is experiencing a winter warm-up, according to a Redfin housing report published on Thursday.
Chen Zhao | Credit: Redfin
The weekly average for 30-year mortgage rates has declined from a high of 7.79 percent in October to 7.29 percent in November — a shift that’s pushed the average mortgage payment down $164 to $2,575. Just four weeks prior, the average mortgage rate was at an all-time high of $2,739.
“Mortgage rates are dropping due to easing inflation and investors betting [the Federal Reserve] will cut interest rates sooner than expected,” Redfin Economics Research Lead Chen Zhao said in a written statement. “Declining rates, along with a sizable year-over-year increase in new listings, are leading to more favorable conditions for some buyers.”
Zhao said the decline in mortgage rates is enough to offset the steady rise in median home prices, which ticked up another 4.2 percent to $364,730 in November. Although rates and prices are far from what homebuyers want, the economist said it’s been enough to get homebuyers and homesellers off the sideline.
Homesellers have placed their homes on the market at the highest rate in two years, with new listings increasing 5.8 percent year-over-year to 64,576. Meanwhile, mortgage-purchase applications increased 5 percent week-over-week; signaling homebuyers’ rush to seize market opportunities.
Although pending sales declined 6.9 percent over the month, the sales that closed did so at a robust pace. The median days on market declined from 37 to 35 days, with 33.7 percent of homes selling in less than two weeks. Nearly 30 percent of homes sold above the asking price (27.3 percent), and the average sale-to-list ratio increased 0.4 percent to 98.8 percent.
On a market-by-market basis, Austin (-9.2 percent); San Antonio (-1.7 percent); Portland, Ore. (-1.3 percent); Detroit (-0.8 percent); Houston (-0.5 percent); Nashville, Tenn. (-0.2 percent) and Denver (-0.1 percent) experienced the greatest declines in median sale price throughout November. Meanwhile, prices continued to rise by double digits in Anaheim, Calif. (19.3 percent); San Diego, Calif. (13 percent); Cincinnati, Ohio (12.3 percent); Miami (10.5 percent) and Providence, R.I. (9.9 percent).
On the new listings front, homesellers were most active in Orlando (22.5 percent), San Jose (21.5 percent), Phoenix (16.9 percent), West Palm Beach (16.7 percent) and Houston (13.4 percent). On the other hand, Atlanta (-14.9 percent); San Francisco (-11.7 percent); Seattle (-11 percent); Providence, R.I. (-8.4 percent) and Portland, Ore. (-6.8 percent) experienced the largest declines in new listings.
Despite continuing micro and macroeconomic headwinds, Zhao said consumers must continue to track the housing market and be prepared to pounce on opportunities as they arise rather than wait for a shift to early-pandemic trends.
“My advice for serious homebuyers is to compare housing costs to recent highs instead of long-ago lows,” she said. “Housing costs are at their lowest level in three months and it’s unlikely they will drop significantly anytime soon. That makes it a relatively good time to lock in a rate.”