Mortgage interest rates continue to be a source of concern for home buyers in the new year, as evidenced by the decline in the number of contracts concluded despite increased home tour activity. Redfin’s latest market report reveals that the Home Buyer Demand Index, a seasonally adjusted measure of tours and other purchasing services by Redfin agents, rose 2% annually in the week ending January 5th. It became.
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Mortgage interest rates continue to be a source of concern for home buyers in the new year, as evidenced by the decline in the number of contracts concluded despite increased home tour activity.
The Home Buyer Demand Index, a seasonally adjusted measure of tours and other purchasing services by Redfin agents, increased at an annualized rate of 2% in the week ended Jan. 5, according to Redfin’s latest market report. However, pending home sales (including contract closings) decreased by 3.1%. The average daily interest rate on a 30-year fixed-rate loan has topped 7% and is increasing every year.
While some buyers are playing a wait-and-see game, others have decided to take advantage of the aggressive listing pop.
Emily Lamb |Credit: Redfin
“Some buyers are agreeing to a 7% interest rate and are not willing to wait any longer and see home prices continue to rise,” said Emily Lam, a Seattle-based Redfin Premier agent. I’m worried about this, so I’ve started seriously looking for a property.” Written Statement. “Some people are starting their search in the hopes that interest rates will drop soon. In any case, we advise buyers to get serious now, as competition for desirable properties will increase as the year goes on. Masu.”
The median asking price for the four weeks ending January 5th was $374,975, an increase of 4.5% year over year, and the median sales price was $375,998, an increase of 5.5%. Steady growth in sales prices and rising mortgage rates led to a 6.7% increase in the median monthly mortgage payment to $2,525.
The market has become slightly less competitive, with the percentage of homes off the market dropping from 23 percent to 22.5 percent over two weeks, and the median number of days on market increasing from 43 to 49 days. The average sales price to list price ratio remained unchanged at 98.2 percent, while the percentage of homes sold above list price decreased from 24 percent to 22.1 percent.
By region, median sales price growth was strongest in the Midwest, with Milwaukee (up 19.5%), Cleveland (up 17.1%), and Warren, Michigan (up 13.6%) all seeing double-digit increases. recorded an increase. Meanwhile, the West leads in pending sales growth, with Anaheim, Calif. (up 10%), San Jose, Calif. (up 7%), and Portland, Ore. (up 3.1%) the top five markets for contract growth. I entered. Autograph session.
The most active sellers were in the East, where new listings were strong despite the holiday season in Washington, D.C. (up 9.4 percent), Virginia Beach, Virginia (up 7.2 percent) and Miami (up 6.6 percent). .
Although sales have slowed, homebuyers need to be prepared to make strong offers to win a listing, Lamb said.
“Three of the four offers made by clients last week were in competition with other offers with competitive terms, including waiving all contingencies and early forgiveness of earnest money deposits,” she said. . “Some homes receive multiple offers within 24 hours of being on the market.”
Redfin’s numbers were broadly in line with the picture painted by agents at other brokerage firms in response to the latest Inman Intel Index survey conducted in late December and early January.
In Intel’s survey, agents reported a significant number of buyers returning to the pipeline following the 2024 close. The agency also reported a more optimistic outlook for its business outlook next year.
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