Homes are lingering on the market longer, up 15% from last year during the four weeks ended Dec. 4, marking the largest uptick in home supply since 2015.
A new Redfin report found home supply isn’t the only market indicator on the rise, its Homebuyer Demand Index, which measures requests for tours and other services, is also growing and is up 5% from last week, as declining mortgage rates are bringing more buyers back into the market.
Redfin deputy chief economist Taylor Marr says while this week has been relatively calm and quiet as we approach the end of “one of the most volatile years in housing history,” he says it’s not over quite yet.
“Next Tuesday’s inflation report is the 500-pound gorilla in the room, and the Fed’s press conference the next day will bring us much more clarity on how soon and how quickly we can expect mortgage rates to come down in the new year,” Marr said. “Since we expect only a small decline in prices next year, mortgage rates will dictate housing affordability, and as a result, demand and sales, in 2023. If rates continue declining, more buyers may wade back into the market, as they’ll have lower monthly payments.”
According to the report, in 11 of the 50 most populous metros, home prices are falling from last year. They include a 7.8% year-over-year drop in San Francisco, 3.6% in San Jose, California, 2.2% in Los Angeles, 1.4% in Detroit, 1.2% in Sacramento and 1.1% in Pittsburgh. Oakland, California; Anaheim, California; Austin, Texas; Philadelphia and Phoenix had declines of less than 1%.
Thirty-year mortgage rates fell to 6.33% for the week ending Dec. 8, marking the fourth week in a row of decreases. The daily average, according to the report, was 6.29% on Dec. 7. Meanwhile, mortgage applications declined 3% week over week during the week ended Dec. 2, and purchase applications were down 40% from 2021.
The lower rate brought the average monthly mortgage payment on a median-priced home to $2,297, down slightly from the previous week and down more than $200 from a month earlier. Year over year, mortgage payments are up 38%.
Pending home sales fell 34.9% from last year, again marking the largest decline since January 2015.
During the week ended Dec. 3, Redfin found fewer Google searches for “homes for sale” which was down 34% from last year, but up slightly from the previous week.
In the four weeks ended Dec. 4, active listings rose 15% from last year, marking the biggest annual increase since 2105. Meanwhile, new listings fell 21.6% from last year, the largest decline since May 2020.
The median asking price of a home rose 4.4% from 2021 to $357,470, the slowest growth rate since May 2020. Meanwhile, the median sale price increased 1.9% year over year to $355,500, up just slightly from the week before.