Redfin’s Homebuyer Demand Index is sitting near its highest level since September 2023, according to a new report from Redfin.
Redfin’s Homebuyer Demand Index is up 7 percent year-over-year. Mortgage-purchase applications are up 17 percent month-over-month to their highest level since late January.
Pending home sales rose 6.5 percent from a year earlier during the four weeks ending Dec. 1, on par with the annual increases Redfin has seen over the last two months.
Redfin said there are a few reasons house hunters are coming out of the woodwork despite high mortgage rates and home prices:
- Many people were waiting for the election to pass before getting serious about buying a home. Redfin saw a burst in early-stage homebuying activity, like home tours, immediately after the election, and it has continued.
- Buyers have grown accustomed to elevated mortgage rates, and many have accepted they’re unlikely to come down anytime soon. The current weekly average rate is 6.81 percent, roughly the middle of the 6 percent to 7.8 percent range seen over the last two years.
“The market is strong, with a lot of pent-up demand after a slow summer and early fall,” Mimi Trieu, a Redfin Premier agent in the Bay Area, said in a release. “Buyers realized mortgage rates may not drop below 5 percent, and probably not below 6 percent, in the near future. They are also noticing there are not many desirable, move-in ready homes for sale that are priced reasonably, so they’re pushing forward and negotiating for good deals. Homes that have been sitting on the market since the summer or early fall are finally selling.”
On the for-sale side, new listings are up 3 percent year-over-year. Though that’s a modest increase, it’s the biggest in two months (with the exception of the prior 4-week period, when the year-over-year increase was inflated because of Thanksgiving).