Homebuying Stalls Due To "Easter Blip"

The Easter holiday kept sellers busy this year as a new report from Redfin shows U.S. home sales increased the smallest amount in the past seven weeks, rising only 8.4% from a year earlier. Although Redfin believes it to be an “Easter blip,” the real estate brokerage firm said it will keep its eye on incoming selling data to ensure it's not the start of a larger trend. 

The same goes for homebuyers; although some are pulling out of the market due to high pricing, others may be simply taking a break from touring and making offers due to the Easter holiday. The report shows buying demand softened with home tours up just 15% from the start of the year compared to last year’s 21%. Mortgage-purchase applications were also flat that week. Pending home sales fell 2.8% from a year ago, and posted an unseasonal decline during the last week of March. 

However, the slowdown in home buying activity didn’t cause home prices to budge. The U.S. median home-sale price was $376,223, up 4.7% from a year earlier. Median monthly housing payments were just $13 shy from October’s all-time high. That’s when home prices were lower but mortgage rates were nearing 8%, versus just under 7% during the week of Easter. 

Redfin economists hold out some hope for buyers, though, forecasting a possible rate cute in June 2024. 

“Buyers may get a break on housing costs in the coming months,” said Redfin Economic Research Lead Chen Zhao. “Daily average mortgage rates rose this week because of some disappointing economic news. But if the upcoming job and inflation reports show that the economy is heading in the right direction, the Fed is likely to confirm they will cut interest rates in June, which would lower mortgage rates. Home-price growth could soften as spring goes on if new listings regain the momentum we saw before Easter.”