Homebuyers are getting back in the game.
Real estate brokerage Redfin’s Homebuyer Demand Index is sitting at its highest level since Sept. 2023, as prospective buyers come off the sidelines to embrace lower mortgage rates and a growing number of listings.
A seasonally adjusted measure of tours and other buying services from Redfin agents, the index was up 7% on an annual basis the week ending Dec. 1. Additionally, mortgage purchase applications are up 17% month over month, hitting their highest level since late January.
Pending home sales, meanwhile, rose 6.5% from a year earlier during the four weeks ending December 1, on par with the annual increases Redfin has seen over the last two months.
“The market is strong, with a lot of pent-up demand after a slow summer and early fall,” said Mimi Trieu, a Redfin Premier agent in the Bay Area. “Buyers realized mortgage rates may not drop below 5%, and probably not below 6%, in the near future. They are also noticing there are not many desirable, move-in ready homes for sale that are priced reasonably, so they’re pushing forward and negotiating for good deals."
"Homes that have been sitting on the market since the summer or early fall are finally selling,” they added.
Analysts attributed the return of homebuyers to the market to several factors.
“Many people were waiting for the election to pass before getting serious about buying a home,” Redfin Data Journalist Dana Anderson said in her report. “Redfin saw a burst in early-stage homebuying activity, like home tours, immediately after the election, and it has continued.”
“Buyers have grown accustomed to elevated mortgage rates, and many have accepted they’re unlikely to come down anytime soon. The current weekly average rate is 6.81%, roughly the middle of the 6% to 7.8% range seen over the last two years. On the for-sale side, new listings are up 3% year over year."
