In November, both new listings and pending home sales surged to their highest levels in approximately a year, driven by increased buyer and seller activity and a slight decline in mortgage rates, according to a recent report from Redfin. The report also noted a significant year-over-year increase in home prices, marking the largest jump since late 2022.
New listings experienced a 1.3% month-over-month increase, reaching their highest level since October 2022 on a seasonally adjusted basis. Although the year-over-year increase was relatively small at 0.1%, this gain marked the first positive change in 18 months. Active listings, representing the total supply of homes for sale, grew by 3.9% month over month, marking the most substantial increase since July 2022, although they remained 7.9% lower than a year earlier.
“Buyers and sellers are learning to live with uncertainty,” said Shay Stein, a Redfin Premier real estate agent in Las Vegas. “They’ve realized no one has a crystal ball that can predict exactly when mortgage rates will fall back to 5%, so they’re making moves now because they can only wait so long to be near their grandkids, live in an RV like they’ve always dreamt of or finalize their divorce.”
While mortgage rates have not yet returned to 5%, recent rate declines have encouraged buyers. In many cases, their monthly payments are now $200 lower than they would have been if they had locked in a rate three weeks earlier when they began their home search. The average 30-year fixed mortgage rate decreased each week in November after reaching a 23-year high of 7.79% at the end of October. By the end of November, it had fallen to 7.22%, and it currently stands at 6.95%, although still higher than the 6.3% rate of one year ago.
Pending home sales experienced a 2% month-over-month increase in November, reaching their highest level in a year on a seasonally adjusted basis, though they were down 0.1% from the same month a year earlier.
Another factor contributing to the increase in sales is the growing alignment between buyers and sellers. Sellers now understand the importance of pricing their homes fairly and, in some cases, offering concessions to buyers, such as covering closing costs or providing mortgage-rate buydowns.
The report also highlighted the rise in median U.S. home sale prices, which reached $408,732 in November, reflecting a 3.7% year-over-year increase—the most significant jump since October 2022. However, prices did decrease by 1.1% from the previous month. Annual home price growth appears to be normalizing after the extraordinary fluctuations seen during the pandemic, returning to the 2%-7% range observed before the pandemic.
Despite elevated mortgage rates affecting demand in recent months, prices have continued to rise due to heightened competition for a limited supply of homes. Although listings have increased slightly in recent months, they remain below historical standards.
However, while pending sales reached a one-year high in November, closed sales remained near their recent low. On a seasonally adjusted basis, closed sales barely changed from the previous month (0.2%) and fell by 5.4% compared to the previous year. One notable factor contributing to this trend is the increased cancellation rate for home-purchase agreements. Approximately 16.9% of homes that went under contract in November—equivalent to roughly 45,000 agreements—were canceled. This marked the highest percentage of canceled deals in Redfin records dating back to 2017, up from 16.8% in the previous month and 15.6% one year earlier.
According to Stein, while some buyers and sellers have come to terms with today’s economic uncertainty, that same uncertainty is causing many of them to get cold feet. "Even though mortgage rates have dropped, housing affordability remains strained, meaning a lot of buyers still get nervous when they see their monthly payment on paper," he added.
