Pending U.S. home sales posted their smallest year-over-year decline in two years (-3 percent) during the four weeks ending Jan. 7, according to a new report from Redfin.
Mortgage-purchase applications are up 3 percent from a month ago, and Redfin’s Homebuyer Demand Index is up 5 percent from a month ago.
“More buyers are out there touring this week; they feel optimistic now that rates have come down a bit,” Phoenix Redfin Premier agent Heather Mahmood-Corley said in a release. “I’m advising house hunters to start making offers now because the market feels pretty balanced. Interest rates are lower and there are more listings, but there’s not much competition yet. With activity picking up, I think prices will rise and bidding wars will become more common.”
Redfin agents report that as the new year kicks off, more sellers are listing and more buyers are going on tours and applying for mortgages as rates remain in the mid-6 percent range, down from 8 percent in October.
Buyers are reportedly motivated by lower mortgage payments – the median U.S. housing payment is down $327 (-12 percent) from October’s all-time high – and sellers are motivated by increased demand and the lock-in effect easing.
There are 9 percent more new listings than there were a year ago, and while the total number of listings is down 3 percent annually, that’s the smallest decline since June, Redfin added.