Residential Real Estate News
Driven by High Mortgage Rates, Pending Home Sales Drop 13% Annually in September
National property broker Redfin reports that U.S. mortgage rates are sitting near a two-decade high and U.S. home prices rose 3% year over year during the four weeks ending September 17, 2023, pushing monthly housing payments to an all-time high.
What homebuyers are doing: Waiting for homes to become more affordable and for more of them to hit the market. Soaring costs have pushed pending home sales down 13% from a year ago. The total number of homes for sale is down 16%, as many homeowners stay put to keep relatively low mortgage rates.
What home sellers are doing: A few more home sellers have jumped off the sidelines. New listings have stabilized, ticking up slightly since the beginning of September. They're down 7% from a year earlier, but that's the smallest decline since July 2022 (though it's worth noting that new listings were falling rapidly at this time last year). It's possible that some homeowners are taking advantage of rising home prices and low inventory, counting on being one of the only homes for sale in their neighborhood.
Where the Fed comes in: The Federal Reserve decided against an interest-rate hike at their meeting this week. But they also signaled that interest rates are likely to remain higher than anticipated into 2024 and 2025, which could keep borrowing costs--and mortgage rates--higher for longer. Buyers who are waiting for housing costs to come down may consider jumping into the market if they can afford to, because a meaningful decline probably isn't coming soon.
