In a promising development for hopeful homeowners, new listings surged by 1.4% in September, marking the most significant monthly growth since February 2022, reveals a Redfin report. However, it's not all sunshine and rainbows; new listings remain 8.9% below last year’s figure, primarily due to the soaring mortgage rates.
“A lot of Americans are sitting on piles of money in their homes, and some are opting to cash out even if it means giving up their low mortgage rate; they’re worried there’s a possibility home prices will fall if rates remain elevated. We expect rates to remain high for the foreseeable future,” said Redfin Chief Economist Daryl Fairweather. “But we also expect prices to stay high into next year. Housing supply is so strained that even a small uptick in listings lures buyers off the sidelines, bolstering sales.”
Despite this, a spike in mortgage rates has led to a 1.5% drop in closed sales from last month, signaling caution among buyers. Roughly 53,000 U.S. home-purchase agreements were canceled in September, equal to 16.3% of homes that went under contract that month — the highest percentage since October 2022, when mortgage rates surpassed 7% for the first time in two decades. That compares with 15.2% a month earlier and 15.8% a year earlier.
“Buyers are extra cautious right now. They want to make sure they’re getting a good deal given how much mortgage payments have gone up. When they don’t feel like they’re getting a good deal, they’re backing out,” said Heather Kruayai, a Redfin Premier Agent in Jacksonville, Fla., which saw the second highest rate of deal cancellations among the major metros Redfin analyzed. “Transactions are also falling apart due to skyrocketing insurance premiums and disagreements between buyers and sellers over necessary repairs. Overall, buyers hold a lot of the cards right now, and sellers are having to give out more concessions to close the deal.”
The limited housing supply continues to propel prices, with the median U.S. home sale price hitting $412,081 in September. Homebuyer competition is evident, with 37.4% of homes getting contracted within two weeks.
Metropolitan data from September 2023 uncovers significant fluctuations. While pending sales plummeted in Honolulu, Birmingham, and Colorado Springs, they witnessed an upward trend in North Port, Detroit, and Tampa. Closed home sales declined the most in Tacoma, Oxnard, and Fresno but surged in North Port, Cape Coral, and Tampa. Prices rose in Rochester, Anaheim, and Buffalo but dipped in Austin, North Port, and San Francisco.
