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42 | M R EP O RT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST ORIGINATION Homebuyers Return as Market Shifts Toward Their Favor According to a Redfin study, as homebuyers adjust to 6% mortgage rates, more homes have gone under contract in January than in the entire fourth quarter. T he housing market has begun to recover after hitting a low point in the second week of November, according to a report from Redfin. The number of Redfin customers request- ing tours has improved by 17 percentage points from Novem- ber, and the number of people contacting Redfin agents to start the homebuying process has im- proved by 13 points. Compared with a year ago, home tours and service requests are down 23% and 27%, but that's an improve- ment from the November trough when both were down 40%. This is already translating into more home sales. Redfin agents report that bidding wars are back in some markets, including Seattle, central Florida, and Richmond, Virginia. Homebuyer demand remains down from its early 2022 highs, but the market has shifted into a new phase and well-priced listings are selling quickly. Homebuyers Return as Power Dynamics Shift Toward Their Favor Homebuyers have begun to acclimate to 6% mortgage rates, which may feel like a relief after watching affordability erode as rates surpassed 7% in the fall. "I've seen more homes go under contract this month than in the entire fourth quarter. Listings that were stagnant in November and December are suddenly get- ting one to two offers," San Jose, California, Redfin agent Angela Langone said. "I'm getting texts and emails from prospective buy- ers now that the new year is in full swing, and the holidays are behind us. Mortgage rates aren't stopping people as much as they were at the end of 2022 now that they're down from their peak and sellers are more willing to negoti- ate. Some buyers are having luck winning a home for under asking price, especially if it has been on the market for several weeks, but those days may be numbered." Mortgage applications are up 28% from early November as the average 30-year-fixed mortgage rate has declined to 6.15% from its November peak of 7.08%—the largest 10-week decline since 2009. That has sent the typical home- buyer's mortgage payment down 10% (about $180) since fall. Pending home sales rose 3% in December from November on a seasonally adjusted basis—the first month- over-month increase in 14 months. Bidding Wars Are Back in Some Markets While demand is coming back in some parts of the country, homes that are eliciting bid- ding wars tend to be affordable, suburban, single-family, move-in ready, and priced competitively. Preliminary data on the share of Redfin agents' offers facing bid- ding wars points to small upticks in the Seattle and Tampa markets this month. "Bidding wars are back in Seattle," local Redfin real estate agent Shoshana Godwin said. "One of our Issaquah listings got 12 offers and is under contract for $155,000 over the $1.4 mil- lion list price. The buyer waived every contingency, handed over $300,000 of earnest money, and is letting the seller stay for free for two months after closing. Another home in Seattle's popular Ballard neighborhood was recently del- isted after sitting on the market for over three months. The seller relisted it last week and it went pending in under a day." Eric Auciello, Redfin's team manager in Tampa, has seen three modest single-family homes priced around $300,000 wind up in bidding wars in central Florida this month, with 16, 17, and 23 competing offers. "Homes that are in desirable school districts, priced well, and