Pending U.S. home sales rose 3.5% year over year during the four weeks ending October 20, the second-largest increase in three years following last week's 3.7% rise. On a local level, pending sales are up in 35 of the 50 most populous U.S. metros, the most in three years.
Just 12 days from the presidential election, a new report from digital brokerage Redfin asserts homebuying demand remains strong, even in the face of high housing costs. Typically, consumers hit a shopping slump around presidential elections when it comes to major purchases like houses, cars, and investments, per a study from the New York Times.
Chen Zhao, Redfin’s economic research lead, said she would expect a bigger drop-off in homebuying demand given how much mortgage rates have increased in the last few weeks. The weekly average mortgage rate is 6.44%, up from a two-year low of 6.08% at the end of September, and the daily average is 6.92%, its highest level since July.
Demand is also holding up at earlier stages of the homebuying process, per Redfin’s Homebuyer Demand Index, a measure of tours and other buying services from Redfin agents. The Index hit its highest level since May, inching up 7% since last month, and is up 3% year over year.
Rising rates and stubbornly high home prices have pushed the median U.S. monthly housing payment to $2,587, the highest level since July (except the prior 4-week period, when the median payment was $2,591). Cash buyers may be propping up home sales: Mortgage-purchase applications fell 5% in the last week, dropping near their lowest level in a year, even as pending sales and early-stage demand hold up.
On the selling side, new listings of homes for sale are up 2.2% annually, one of the smallest increases in a year.
Months of supply is in a healthy range, too, increasing by 0.6 pts. year over year to 4.1 months. Redfin says that 4 to 5 months of supply is considered balanced, with a lower number indicating seller’s market conditions.
