Tours Are Up Early In 2025, But Home Sales Still Stall

Redfin's latest report reveals a 2% increase in homebuyer activity, as measured by its Homebuyer Demand Index, during early January 2025.

This modest rise reflects buyers adjusting to persistently high mortgage rates — which have reached their highest point since July — and capitalizing on a greater inventory of homes compared to recent years. However, the modest uptick in activity has yet to translate into increased sales, with pending home sales falling 3.1% year-over-year.

Additionally, new listings declined 2.5%, the largest drop in over a year. 

Although more buyers are engaging with the market, their interest is not yet translating into finalized contracts. Nationwide, homes on the market for at least 60 days accounted for 54.5% of all listings in November 2024. Economic uncertainty and affordability concerns continue to play a significant role in buyer hesitation, even as some house hunters show urgency in their search.

Redfin agents have observed that some buyers are motivated by fears of home prices continuing to rise, while others are cautiously optimistic about potential rate declines. Emily Lam, a Redfin Premier agent in Seattle, highlighted the increasingly competitive nature of the market, saying:

“Three of the four offers my clients have made in the last week have competed against other offers with competitive terms, like waiving all contingencies and releasing earnest money early. Some homes are getting multiple offers within 24 hours of hitting the market.”

This competition illustrates a growing urgency among certain buyers to secure homes now in spite of high borrowing costs. For these buyers, the potential for further price increases outweighs the financial burden of 7% mortgage rates. Other would-be homeowners remain on the sidelines, awaiting clearer signs of economic stability or more favorable borrowing conditions.