The median sale price of a home in the U.S. rose 1.9% year-over-year in October – yet median monthly housing payments fell 1.4% over the year to $2,530, the biggest drop in 12 months.
This seemingly contradictory response was due to a decline in the monthly mortgage rate – a drop that was deep enough to push monthly payments down to their lowest point in a year, despite the 1.9% uptick in sale prices, according to a new report from Redfin. And when the Fed hinted that a further drop in interest rates was not a certainty in December, as expected, mortgage rates actually rose.
Still, hopeful signs for home sellers exist, even as buyers continue to hold back. Pending sales rose 1% year-over-year and applications for mortgages were up 5% week over week. However, some buyers are still holding fire in the hope that mortgage rates will fall below 6% or because the current economic uncertainty discourages them from moving forward.
Another positive is that more households are listing their homes for sale, as they rose 4.6% year-over-year. Agents advise sellers to price fairly from the start and to expect negotiations. Those who hold out for the right price may find sales take longer to complete.
Both the daily and weekly average 30-year fixed mortgage rates fell year over year. Redfin’s Homebuyer Demand Index rose over the month of October, but on an annual basis was down 10%. However, Google searches for homes for sale rose more than 10% during the month and 20% over the year. Plus, tours have increased 8% since January 1.
Based on data on homes listed for sale or sold in over 400 metro areas, the median sale price of a home on October 26 was $391,750, the biggest increase in six months and up 1.9% from the previous year. The median asking price was $398,225 or 2.9% higher year-over-year. There were increases in both new and active listings. However, the share of homes sold within two weeks slipped from 32% to 29.5%, and homes stayed on the market for a median of six days longer.
Among the 50 metros with the biggest year-over-year price increases were Cleveland (14.1%), Detroit (12.9%), Newark (9.7%), Milwaukee (7.8%) and Philadelphia (7.8%).
Meanwhile, 13 metros experienced negative effects. Prices fell the most were Dallas (-4.4%), Jacksonville (-3.3%), Atlanta (-2.1%), Fort Lauderdale (-1.8%) and Tampa (-1.4%).
Pending sales rose in West Palm Beach, Tampa, Fort Lauderdale, Orlando and Pittsburgh. They dropped in Seattle, San Antonio, Denver, San Jose and Virginia Beach.
The improvement in new listings and pending sales in coastal Florida, especially Tampa and West Palm Beach, was largely due to two large hurricanes that stalled the market in October. Other metros where new listings rose were Montgomery County, PA, Philadelphia and Phoenix. However, there were drops in new listings in Denver, San Francisco, Jacksonville, San Antonio and Anaheim.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.