According to a recent Redfin study, U.S. pending home sales down 0.3% from a year earlier during the four weeks ending November 9. This is a slight decrease but the first in four months.
The selling of homes that remain on the market for a lengthier period of time: The median time it takes for a home to enter into a contract is 49 days, which is the longest it has been since 2019.
House hunters are hesitant because costs are high and the economy is uncertain:
- The weekly average mortgage rate rose to 6.22% after dropping to a year-low of 6.17% a week earlier after the Fed indicated it may not cut interest rates in December.
- The median home-sale price increased 2.4% year over year, the biggest jump in six months.
- Many would-be buyers are wary of purchasing a home while the U.S. economy feels unstable. More than 20% of Americans are delaying a major purchase like a home or car due to the government shutdown, and another 15% have canceled a major purchase altogether, per a recent Redfin survey.
With hundreds of thousands more sellers than buyers in the market countrywide, the selling side is doing better. In order to draw in buyers, Redfin brokers advise sellers to set a reasonable price for their property from the outset. Similar to the rises Redfin has witnessed over the past month, new property listings are up 3.4% year-over-year this week.
Additionally, agents say that some prospective buyers are holding off on making a move until mortgage rates fall below 6%.
“House hunters are sensitive to rates and prices; many are waiting for one or both to drop before buying,” said W.J. Eulberg, a Redfin Premier agent in Milwaukee. “But that’s not always a great strategy. If mortgage rates come down significantly, there will be more bidding wars. And if prices drop, it will probably be because the economy has weakened and people are losing their jobs. For people who can afford a home now, they may consider jumping into the market while competition is low and many sellers are willing to negotiate on price or offer concessions like funds to cover closing costs.”
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