With pre-election jitters over, demand to buy homes is bouncing back a bit. That’s a key takeaway in a new report from real estate brokerage Redfin.
And while the recent decline in 30-year fixed mortgage rates – from an average weekly rate of 6.84% three weeks ago to an average weekly rate of 6.69% – “isn’t pushing demand to new heights,” it is helping convince consumers to go on more home tours and put in more loan applications.
A year ago, that weekly average 30-year fixed mortgage rate stood at 7.22%, or nearly 8% higher than it is now.
Yet it’s not so much the decline in average mortgage rates but that homebuying demand is settling into a “new, post-election normal,” noted Chen Zhao, Redfin’s economic research lead, in a press release. The 6.84% average mortgage rate from three weeks ago was a four-month high, Redfin stated, and the new 6.69% weekly average tamps down the “typical” U.S. homebuyer’s monthly payment to $2,527.
That seems to be helping at least a little, coupled with the election being decided. Mortgage-purchase applications are up 20% from a month ago, according to Redfin’s report, as buyers “have accepted the fact that mortgage rates are likely to remain above 6% for the foreseeable future.”
The company looks at a mix of factors such as home tours and mortgage applications to gauge its Homebuyer Demand Index, which as of the week ending Dec. 8 is up 5% from one month earlier. The index is up 8% from this same time last year.
Pending home sales are up 4% year-over-year. There were 980,776 active home listings nationally, up 11.3% – though that’s the smallest increase since March, Redfin noted – and overall new listings are up 8% year-over-year, so inventory is climbing, though not by leaps and bounds.
Even so, Google searches for “home for sale” are down 7% from last year, the report stated, and the share of listed homes sold off the market within two weeks is now 27.2%, which is down from 29% one year ago. Homes are taking a bit longer to sell, with the average median days on the market at 43 – one week longer than the average a year ago.
