Redfin Report: Housing-Market Activity Is Picking Up in 2024, But Severe Winter Weather Keeps Some Buyers and Sellers on the Sidelines

Rhea-AI Summary

The housing market is showing increased activity in 2024, with mortgage applications and new listings on the rise. Redfin economists attribute the slower growth to harsh winter weather. Mortgage-purchase applications are up 8% from a month ago, and new listings have increased 8% year over year. Buyers and sellers are motivated by steady mid-6% mortgage rates, resulting in a rise in homebuyer demand and listings. The typical U.S. homebuyer's monthly housing payment is $2,456 with this week's average rate, down from the record high of over $2,700 in October. The market is expected to pick up as the spring season approaches, provided that mortgage rates remain stable.

Positive

• Mortgage-purchase applications are up 8% from a month ago
• New listings increased 8% year over year
• Steady mid-6% mortgage rates are driving homebuyer demand and listings
• Typical U.S. homebuyer's monthly housing payment is $2,456 with this week's average rate
• Market expected to pick up as the spring season approaches

Negative

• None.

Economist

The recent uptick in mortgage-purchase applications, as reported, suggests a renewed interest in the housing market, potentially signaling a shift in consumer confidence and spending behavior. This 8% rise, juxtaposed with a steady median monthly mortgage payment of $2,456, indicates a market response to the stabilization of mortgage rates in the mid-6% range. This stabilization, following a period of volatility with rates peaking at 8%, could be a precursor to increased economic activity within the housing sector.

From an economic standpoint, the housing market is a critical component of the broader economy, often acting as a barometer for overall economic health. The reported increase in new listings, up 7.8% year over year, coupled with a median sale price growth of 4.2%, reflects not only a recovery from the holiday season but also an adaptation to the current economic climate. These metrics, however, must be contextualized within the larger macroeconomic environment, which includes considerations such as inflationary pressures and potential shifts in monetary policy that could affect mortgage rates and, consequently, buyer demand.

It is also important to consider the regional disparities highlighted in the report. While some metropolitan areas are experiencing significant increases in median sale prices, others are seeing decreases. These variances underscore the localized nature of real estate markets and the influence of regional economic factors and housing supply dynamics. The long-term implications for the housing market will largely depend on broader economic trends, including employment rates, wage growth and the trajectory of interest rates.

Market Research Analyst

The housing market's current dynamics can be attributed to several key indicators. The slight uptick in the daily average 30-year fixed mortgage rate to 6.88% from 6.78% a week earlier and the weekly average rate nearing its lowest level since May, are indicative of a market that is sensitive to even minor fluctuations in interest rates. The increase in Google searches for 'home for sale' by 10% from a month earlier, despite being down 13% year over year, suggests a growing interest in home buying, likely spurred by the lower mortgage rates.

Furthermore, the reported 3.9% of homes with a price drop and an average sale-to-list price ratio of 98.3% reflect a market that is becoming increasingly competitive, with sellers possibly having to adjust expectations to align with buyer demand. The balance between pending sales and new listings provides insight into market liquidity and potential shifts in the supply-demand equilibrium. The increase in new listings could lead to a more balanced market, moving away from the seller's market conditions indicated by a supply of less than 4 months.

Attention to metro-level data is crucial for stakeholders, as it reveals market heterogeneity. For instance, the significant increases in median sale prices in certain California and Florida metros contrast with declines in places like Austin, TX and Oakland, CA. These discrepancies could influence investment and relocation decisions, as well as inform real estate development strategies.

Financial Analyst

Analyzing the housing market from a financial perspective involves assessing the potential impact on real estate investment trusts (REITs), mortgage lenders and home construction companies. The report's indication of a more active housing market could lead to positive earnings for these sectors if the trend continues. However, investors should remain cautious, as the housing market is historically cyclical and sensitive to external factors such as economic policy changes and consumer sentiment.

The steadying of mortgage rates may provide a more predictable environment for mortgage-backed securities, affecting their yields and attractiveness to investors. Additionally, the observed rise in mortgage applications suggests an increase in lending activity, which could positively impact the financial performance of banks and other lending institutions.

It is also important to monitor the potential long-term effects of the current housing market trends on the stock market. If the trend of increased buying activity continues into the spring, as suggested by the report, it could contribute to a bullish outlook for the housing sector. However, the market must remain vigilant for any sudden changes in mortgage rates or economic conditions that could alter the trajectory of the housing market's recovery.

2024 is shaping up to be more active than 2023 for homebuyers and sellers, with mortgage applications and new listings rising. But Redfin economists believe demand and listings would be rising more if not for harsher-than-usual winter weather.

SEATTLE--(BUSINESS WIRE)-- (NASDAQ: RDFN) — Mortgage-purchase applications are up 8% from a month ago, and Redfin agents report that lower mortgage rates are piquing buyers’ interest, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. On the sell side, new listings increased 8% year over year during the four weeks ending January 14.

Buyers and sellers are making moves largely because mortgage rates are holding steady in the mid-6% range, down from 8% in October. The typical U.S. homebuyer’s monthly housing payment is $2,456 with this week’s average rate; while that’s up 10% year over year, it’s down from October’s record high of over $2,700.

Redfin economists say buyer demand and listings would likely be picking up more if not for the severe winter weather much of the country experienced over the last week. “We expected both buyers and sellers to react more strongly to last month’s drop in mortgage rates once the holidays passed, but frigid weather and snowstorms have halted a lot of buying and selling plans,” said Redfin Economic Research Lead Chen Zhao. “As long as rates don’t shoot up, we expect the market to pick up as the spring season approaches.”

Redfin agents say weather conditions aside, buyers are feeling more optimistic. “People who were casually house hunting when rates were higher are getting serious now,” said Chicago Redfin Premier agent Dan Close. “Buyers are feeling more confident that they can get good value for their money, and many first-timers are jumping in because Chicago rents are still rising. Homeowners who were waiting for the holidays to be over and rates to come down before selling are getting ready to list. I have several listings prepped to hit the market, some as early as this week and some throughout the rest of the first quarter.”

Leading indicators

Indicators of homebuying demand and activity
	Value (if applicable)	Recent change	Year-over-year change	Source
Daily average 30-year fixed mortgage rate	6.88% (Jan. 17)	Up slightly from 6.78% a week earlier	Up from 6.07%	Mortgage News Daily
Weekly average 30-year fixed mortgage rate	6.66% (week ending Jan. 11)	Near lowest level since May	Up from 6.33%	Freddie Mac
Mortgage-purchase applications (seasonally adjusted)		Up 9% from a week earlier; up 8% from a month earlier (as of week ending Jan. 12)	Down 20%	Mortgage Bankers Association
Google searches for “home for sale”		Up 10% from a month earlier (as of Jan. 16)	Down 13%	Google Trends
We excluded Redfin’s Homebuyer Demand Index this week to ensure data accuracy

Key housing-market data

U.S. highlights: Four weeks ending January 14, 2023 Redfin’s national metrics include data from 400+ U.S. metro areas, and is based on homes listed and/or sold during the period. Weekly housing-market data goes back through 2015. Subject to revision.
	Four weeks ending January 14, 2023	Year-over-year change	Notes
Median sale price	$362,113	4.2%
Median asking price	$372,220	5.4%
Median monthly mortgage payment	$2,456 at a 6.66% mortgage rate	9.8%	Down nearly $300 from all-time high set during the four weeks ending Oct. 22
Pending sales	51,411	-3.1%
New listings	48,507	7.8%
Active listings	762,737	-2.4%	Smallest decline since June
Months of supply	4.4 months	+0.3 pts.	4 to 5 months of supply is considered balanced, with a lower number indicating seller’s market conditions.
Share of homes off market in two weeks	25.1%	Unchanged
Median days on market	44	-2 days
Share of homes sold above list price	23.2%	Up from 21%
Share of homes with a price drop	3.9%	+0.2 pts.
Average sale-to-list price ratio	98.3%	+0.5 pts.

Metro-level highlights: Four weeks ending January 14, 2023 Redfin’s metro-level data includes the 50 most populous U.S. metros. Select metros may be excluded from time to time to ensure data accuracy.
	Metros with biggest year-over-year increases	Metros with biggest year-over-year decreases	Notes
Median sale price	Anaheim, CA (16.6%) West Palm Beach, FL (14.8%) Newark, NJ (14.1%) Fort Lauderdale, FL (13.1%) Miami (12.8%)	Oakland, CA (-3.4%) Austin, TX (-2.8%) Fort Worth, TX (-0.3%) San Antonio, TX (-0.1%)	Declined in 4 metros
Pending sales	San Jose, CA (10.6%) Detroit (9.5%) Milwaukee, WI (6.1%) Columbus, OH (5.6%) Pittsburgh, PA (4.7%)	Newark, NJ (-14.3%) New Brunswick, NJ (-13.9%) New York (-13.2%) San Diego (-12.2%) West Palm Beach, FL (-11.3%)	Increased in 13 metros
New listings	Phoenix (24.4%) Minneapolis, MN (22.1%) Pittsburgh, PA (19.1%) Houston (18.6%) San Antonio, TX (17.6%)	Chicago (-13.8%) Atlanta (-10.2%) Newark, NJ (-7.3%) Providence, RI (-7.1%) Portland, OR (-5.6%)	Declined in 10 metros

To view the full report, including charts, please visit:
https://www.redfin.com/news/housing-market-update-buyers-sellers-more-active

About Redfin

Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, title insurance, and renovations services. We also run the country's #1 real estate brokerage site. Our home-buying customers see homes first with same day tours, and our lending and title services help them close quickly. Customers selling a home in certain markets can have our renovations crew fix up their home to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Customers who buy and sell with Redfin pay a 1% listing fee, subject to minimums, less than half of what brokerages commonly charge. Since launching in 2006, we've saved customers more than $1.5 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 4,000 people.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email press@redfin.com. To view Redfin's press center, click here.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240118927046/en/

Redfin Journalist Services:

Ally Braun, 206-414-8880

press@redfin.com

Source: Redfin

FAQ

What is the percentage increase in mortgage-purchase applications from a month ago?

Mortgage-purchase applications are up 8% from a month ago.

What is the typical U.S. homebuyer's monthly housing payment with this week's average rate?

The typical U.S. homebuyer's monthly housing payment is $2,456 with this week's average rate.

What is the expected market trend as the spring season approaches?

The market is expected to pick up as the spring season approaches, provided that mortgage rates remain stable.