Falling mortgage rates have breathed new life into the housing market as listings and pending home sales have both increased, Redfin reports.
More homes changed hands in November as mortgage rates dropped and buyers and sellers saw more eye-to-eye on price, the report from Redfin’s Lily Katz states.
Still, deals are falling through at the highest rate on record due to lingering economic uncertainty, and some metros continue to see price declines, Katz says.
New listings increased 1.3% in November compared with October, on an adjusted basis, to reach the highest level since October 2022.
Year-over-year, new listings were up 0.1%—a small gain, but the first in a year and a half.
Active listings, or the total supply of homes for sale, grew 3.9% compared with October—the biggest increase since July 2022.
However, active listings were down 7.9% from a year earlier.
“Buyers and sellers are learning to live with uncertainty,” says Shay Stein, a Redfin Premier real estate agent in Las Vegas, in the report. “They’ve realized no one has a crystal ball that can predict exactly when mortgage rates will fall back to 5 percent, so they’re making moves now because they can only wait so long to be near their grandkids, live in an RV like they’ve always dreamt of or finalize their divorce.”
Pending home sales increased 2% month over month in November to the highest level in a year on a seasonally adjusted basis, but fell 0.1% from a year earlier.
“Another reason sales are ticking up is buyers and sellers are finally living in the same reality,” Stein adds. “A year ago, sellers had trouble understanding why they weren’t getting $20,000 over the list price like their neighbor did during the pandemic homebuying boom. Now, they understand that to sell their home, they need to price it fairly and in some cases offer the buyer concessions like money toward closing costs or mortgage-rate buydowns.”
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