Early data shows existing home sales rose in February and relistings also surged, showing consumer confidence in the market.
Despite recent global and economic uncertainty, the spring market is showing signs of positive momentum, and a new report says it could be a busier year for agents than in recent years.
Preliminary data from Zillow shows existing home sales rose 1.8% year-over-year to 239,910 units in February. The number of new pending listings also increased by 3.5% from the previous year and by 11.1% from the previous month.
Meanwhile, available inventory increased at an annual rate of 5% and also increased by 0.4% from January. The number of new listings decreased by 3% compared to the same period last year, but increased by 4.9% from January.
In addition to giving distributors hope for a spring market bustle, the latest preliminary data for February reaffirmed some economists’ suggestions that part of January’s market weakness was due to the unusual winter weather experienced across much of the United States.
Expectations for lower mortgage rates could also help boost the market in the spring, unless interest rates are derailed by the Iran conflict.
“Zillow’s latest data suggests buyers and sellers are starting to regain confidence,” Zillow Chief Economist Misha Fisher said in the company’s report. “Existing home sales were up from a year ago, providing an early glimmer of hope that the housing market is turning the corner after three years of bouncing off the bottom. Buyers will have more homes to choose from on these friendly terms. Lower mortgage rates will also encourage more homeowners who felt trapped to sell by allowing them to afford their next home.”
Redfin’s positive data on increased relistings could also help drive homebuying activity this spring.
A record 45,000 U.S. homes that were delisted last year returned to the market in January, Redfin reported, making it the highest January relisting since at least 2016. These relistings accounted for 3.6% of all homes on the market in January.
For this report, Redfin analyzed MLS data and defined relistings as properties that come on the market after being off the market for at least 31 days in the previous 12 months.
Delistings increased last year as the market shifted in favor of buyers. Buyers have the upper hand in the market, with sellers far outnumbering buyers as buyers pull back due to rising home acquisition costs and economic uncertainty.
As a result, many homes remained on the market and some sellers were reluctant to negotiate. Ultimately, some of these sellers chose to delist their homes rather than reduce the price to see if the market moves in their favor in later months. The number of delistings in December reached a record high of 112,788.
“Many sellers who took their homes off the market last year are now relisting in hopes of taking advantage of the spring home buying season,” Andrew Vallejo, an agent with Austin-based Redfin Premier, said in the firm’s report. “One couple I work with plans to relist their current home as soon as the deal closes on their home in the process of purchasing. Their home was on the market last year, but they hadn’t yet found their dream home, so they didn’t have the incentive to lower the price enough to attract a buyer.”
Mortgage rates are relatively low this year, so some sellers may think they can afford to list a little higher. But sellers should not be greedy, Redfin said, as buyers have more options in the market, especially now that relistings are trending.
“Homebuyers are already getting discounts because there are more homes for sale than buyers,” Asad Khan, senior economist at Redfin, said in a Redfin report. “Some sellers will be more flexible on price when relisting because they’ve already been burned once. Buyers shouldn’t be afraid to ask for concessions. Even if the theoretical list price is higher, sellers may be willing to negotiate.”
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