Shifting Home Market Keeps Buyers, Sellers Unsteady
Mortgage applications rising, mortgage rates falling, and delistings increasing, according to Redfin.
The wobbly single-family home market continued its unsteady ways based on two recent reports from Redfin.
One had mortgage applications increasing as mortgage rates continue to come down – though pending home sales declined as buyers took a break during Thanksgiving.
The other reported a more isolated trend with markets such as Sacramento, Austin and Phoenix experiencing their biggest jump in delistings as prohibitively high housing costs dampened buyer demand.
Nationally, a record 2% of U.S. homes for sale were delisted each week on average during the 12 weeks ending Nov. 20, compared with 1.6% one year earlier, according to Redfin.
“Some sellers are having a hard time grasping that we’re not in a housing-market frenzy anymore—it’s tough for them to swallow that they missed the boat on getting a high price,” Heather Kruayai, a Redfin real estate agent in Jacksonville, Fla., said in prepared remarks.
Sellers are taking their homes off the market because they’re often receiving no offers for the price they want to sell for, and sometimes, no offers at all. A sharp drop in homebuyer demand driven by rising mortgage rates and persistently high home prices has turned many markets sour.
‘Likely Past Peak Inflation’
Falling mortgage rates are bringing some incremental improvement for the market, Redfin deputy chief economist Taylor Marr said in prepared remarks.
“We’re likely past peak inflation, past peak mortgage rates and past the bottom for mortgage purchase applications,” according to Marr. “But there’s further cooling ahead for the housing market, as sales and prices have further to fall before buyers and sellers become comfortable with home-buying costs again.”
Daily rates dipped to 6.29% on Dec. 1, down one full percentage point from a peak of 7.29%, hit just one month earlier.
Austin, LA Home Prices Finally Drop
The end of some long-time trends showed up in some markets as home prices are falling from a year earlier in 10 of the 50 most populous US metros.
Prices fell 8.2% year over year in San Francisco, 2.8% in San Jose, CA, 2.7% in Pittsburgh, 2.3% in Detroit, 1.7% in Sacramento and 1.3% in Austin. They declined less than 1% in Chicago, San Diego, Los Angeles and Philadelphia.
“This marks the first time Austin and Los Angeles home prices have fallen on a year-over-year basis since mid-2019. It’s the first time Chicago prices have fallen since June 2020,” according to Redfin.