According to reports, the number of new listings increased by 8% towards the end of the year, but high mortgage rates and home prices are causing homes to stay on the market longer and buyers are being turned away.
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The number of new listings rose 8% through the end of 2024, but high prices and mortgage rates continued to suppress homebuyer demand, according to a new report from Redfin.
The number of pending home sales and mortgage purchase applications both fell as interest rates hovering around 7% dampened demand, according to a report released Friday morning.
Mortgage purchase applications are down 17% from a year ago, according to the Mortgage Bankers Association’s weekly survey.
Redfin said the number of active listings was 9.7% higher than a year ago as the country moved into a balanced market with a 4.2-month supply of housing.
Homebuyer demand is down 1% compared to a year ago, according to Redfin’s Homebuyer Demand Index. The index measures metrics such as tours and other home buying services requested by Redfin agents.
Meanwhile, the median sales price rose 6.4% in the four weeks ending Dec. 29 to $383,750. This was the largest increase since October 2022, Redfin said.
The daily average interest rate on 30-year mortgages was 7.07%, up from 6.7% a year ago.
In a report released Thursday, Realtor.com economists blamed the economic slowdown on rising mortgage rates from November to December.
“While today’s interest rates are significantly higher than they were just a few months ago, our 2025 forecast shows that both lower interest rates and time will eliminate the ‘lock-in’ effect that was holding down sales this year. “This indicates that home sales can be expected to rise modestly by 1.5% in 2025,” Realtor.com said in a report.
Both reports show that while homes are spending more time on the market than last year, they are still below pre-pandemic levels.
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