According to a new Redfin report, new listings of U.S. homes for sale increased by approximately 1% from the previous year during the four-week period ending January 25, marking the first rise in over two months. Which poses the question, which important factors are contributing to the improvement of new listings?
The answer may or may not come as a surprise to some; however, some of the primary reasons are that there is also a strengthening of demand for homebuying. Pending home sales in the U.S. experienced a year-on-year decrease of 1.6%, marking the smallest drop in almost two months, while mortgage-purchase applications are close to their highest point in three years.
As housing costs decrease, with the median monthly housing payment dropping 6.6% from last year, some house hunters are emerging, and sellers are becoming aware of the rising demand. Decreased mortgage rates. The average mortgage rate for the week is 6.09%, which has increased slightly from the previous week, but it remains close to the lowest level seen in three years. Lower rates not only draw in some homebuyers but also alleviate the mortgage rate lock-in effect and spur certain homeowners to sell.
Homebuyers & Sellers Tip Toe Their Way Back Into the Market
Although there are slightly more sellers and buyers coming off the sidelines, homes continue to take a long time to sell. In January, the average home that sold took 63 days to go under contract—this is a week longer than last year and marks the longest duration in six years. Due to the surplus of home sellers—hundreds of thousands more than buyers—it is a buyer’s market. Meaning, more house hunters can afford to take their time in shopping around.
“Buyers are more serious than they were a few months ago; they’re looking at every listing and meticulously comparing the pros and cons of each one,” said Connie Durnal, a Redfin Premier agent in Dallas. “Buyers are able to take their time and be picky because there are a lot of listings; bidding wars are few and far between. Sellers who need to move know they need to be realistic; some are willing to negotiate prices down and make concessions like repairs, especially because they’re competing with builders of new construction.”
Top five metros with the biggest year-over-year (YoY) increases in median sale price:
- Milwaukee (14.1%)
- Cleveland (11%)
- Philadelphia (10.2%)
- Detroit (8.7%)
- Nassau County, NY (7.1%)
Overall, the average median sale price declined YoY in approximately 16 metros.
Top five metros with the biggest YoY declines in median sale price:
- San Jose, CA (-9%)
- Portland, OR (-3.2%)
- Jacksonville, FL (-3%)
- Dallas (-2.7%)
- Fort Lauderdale, FL (-2.4%)
Top five metros with the biggest year-over-year (YoY) increases in pending sales:
- Columbus, Ohio (13.4%)
- West Palm Beach, FL (8.7%)
- Nashville, TN (6.5%)
- Washington, D.C. (5%)
- Baltimore (4.4%)
Top five metros with the biggest YoY declines in pending sales:
- San Jose, CA (-25.9%)
- Oakland, CA (-25.9%)
- San Francisco (-24.9%)
- Minneapolis (-19.2%)
- Seattle, WA (-19%)
Top five metros with the biggest year-over-year (YoY) increases in new listings:
- Baltimore (18.3%)
- San Jose, CA (15.4%)
- Cincinnati (15.2%)
- Pittsburgh (11.5%)
- Washington, D.C. (7.1%)
Top five metros with the biggest YoY declines in new listings:
- Jacksonville, FL (-16.1%)
- Fort Lauderdale, FL (-15.6%)
- San Francisco (-14.5%)
- Oakland, CA (-13.5%)
- San Diego (-13.4%)
To read the full report, click here.
The post Homebuyers More Optimistic as New Listings Tick Up in January first appeared on The MortgagePoint.
