In a challenging market, one of the big impediments to loan origination has been a lack of home inventory. Affordability – or lack thereof – continues to be an issue, and will likely remain so next year.
Responding to such pressures on buyers, more home sellers are listing their homes hoping to take advantage of recent upticks in buyer interest and high home prices.
The latest research from real estate brokerage Redfin shows new listings of homes are up 7.6% from last year, as of the four weeks ending Dec. 15. Redfin earlier reported that homebuyer activity has increased as pre-election jitters have settled down, with homebuyer interest settling into a new norm of mortgage interest rates above 6%.
Analysis from the Mortgage Bankers Association (MBA) shows mortgage applications closely tracking mortgage rates – up when rates are down, down when rates are up – despite the renewed activity that Redfin notes of potential buyers.
Even so, the recent increase in home listings is the largest year-over-year bump since June, but for the four weeks ending November 24, when the increase was inflated due to Thanksgiving, Redfin notes.
Some listing agents note a more promising year than the last one. “We’re having a busier winter than usual; I have a handful of listings ready to hit the market right after the new year. This time last year, it was crickets,” said David Palmer, a Redfin agent in the Seattle area.
“Buyers are coming out of the woodwork,” he added, “because they’ve accepted that rates in the 6% to 7% range are the new normal, and they know that if they wait to buy, mortgage rates will probably stay the same but prices will be higher.”
Redfin attributes the uptick in home listings to three things:
- The median U.S. home sale price is $383,302, up 6% year over year;
- Consumer confidence has seen a boost, rising to a 16-month high after the election; and
- Sellers are hoping to take advantage of increased homebuying activity.
Pending sales of homes, according to Redfin’s research, stood at 61,417, up 4.1% from this time in 2023. As of Dec. 15, there were 966,321 active home listings, an increase of 11.6% year-over-year.
Just don’t expect huge increases in mortgage applications in the near future – if those continue to track with mortgage rates. “It’s worth noting that mortgage rates may have bottomed out for the time being; daily average rates rose above 7% on December 18 after the Fed signaled it will cut interest rates twice in 2025, instead of four times,” the Redfin report reads.
