Mortgage-Backed Sales Attract Home Buyers

U.S. home sales rose 0.9% from a year earlier to $350,250 in the four weeks ended Jan. 15, the largest monthly increase. according to a new report from Redfin.

Rates remain elevated as consumer activity begins to pick up as mortgage rates decrease due to slower inflation. Mortgage rates fell to 6.15% in the week ending January 19, their lowest level since September. Pending home sales fell 29% year-over-year—a big drop, but the first down—30% in three months. Mortgage-for-sale applications rose 25% from the previous week to the week ending Jan. 13, a jump that could lead to more pending sales. in the coming months.

As demand slows down, some homeowners are reluctant to sell. New listings of homes for sale fell 20% year-over-year in the four weeks ending Jan. 15—but it was the smallest drop in two months.

“People who started searching for homes online and scheduled home visits by the end of 2022 are now home buyers,” said Redfin Senior Vice President Economist Taylor Marr. “Lower interest rates, lower mortgage rates and foreclosures have brought some buyers back into the market. That helps keep the country’s home prices down, which is one of the bright spots for buyers. But many buyers are still sitting on the sidelines and demand could drop if the economy weakens more than expected or mortgage rates rise again.

Home prices fell from a year earlier in 18 of the 50 most popular US metros

Home prices fell year-over-year in 18 of the 50 most populous US metros in the four weeks ending January 15. In contrast, 20 metros saw a decline in prices in the first four weeks and 11 metros saw prices fall in the previous month. .

Prices fell year-on-year to:

  • San Francisco (10.1%)
  • San Jose (6.7%)
  • Austin (5.5%)
  • Detroit (4.3%)
  • Seattle (3.8%)
  • Phoenix (3.7%)
  • Sacramento (3.4%)
  • San Diego (3.1%)
  • Anaheim, California (2.8%)
  • Chicago (2.5%)
  • Los Angeles (2.4%)
  • Oakland, California (2.3%)
  • Boston (2.2%)

They fell below 2% in Riverside, California, Portland, Oregon, New York, Newark, New Jersey, and Las Vegas.

Top tips for buying a home:

  • For the week ending January 19, 30-year mortgage rates fell to 6.15%. The daily average was 6.04% on January 18.
  • Mortgage-purchase applications in the week ending Jan. 13 rose 25% from the week before, seasonally adjusted. Sales requests were down 35% from the year before.
  • Google searches for “homes for sale” rose about 30% from their November low in the week ending January 14, but fell to about and 26% from the previous year.

Key values ​​of the housing market:

  • The cost of buying a home is $350,000, up 0.9% per year, the highest monthly income.
  • The average price of newly listed homes was $357,200, up 3.9% year over year, the largest increase in two months.
  • The monthly mortgage payment for the house is priced at $2,262 at 6.15% of the current mortgage. That’s unchanged from the week before and down $245 from the October high. Monthly mortgage payments are up 30% from last year.
  • Pending home sales fell 29.1% year over year. This is the first drop of 30% in three months.
  • Among the 50 most popular US metros, pending sales fell in Las Vegas (-63% YoY), Phoenix (-56.3%), Austin (-53.7%), Nashville (-52.9%) and Jacksonville , FL (-52.4%). ).
  • Although they fell in all 50, they declined the least in Chicago (-12.8%), Pittsburgh (-20.1%), San Francisco (-23.2%), Boston (-24.4%) and Cleveland (-25%).
  • New home listings for sale fell 20% year over year.
  • Active listings (the number of homes listed for sale at any point in the season) were up 21.8% from a year earlier, the largest increase which has been annual since 2015.
  • Months of supply—a measure of the balance between supply and demand, calculated by dividing the number of active listings by closed sales—was 4 months, up from 3.7 months last week. earlier than 2 months in the previous year.
  • 29% of homes under contract accepted an offer within the first two weeks on the market, up slightly from the previous week but down from 36% a year earlier.
  • The homes that sold were on the market for an average of 45 days. That’s up two weeks from 31 days a year earlier and a record low of 18 days set in May.
  • 21% of homes sold above their last list price, down from 40% a year earlier and the lowest since March 2020.
  • On average, 4.3% of homes for sale each week had a price drop, down slightly from the week before and down from 5.3% the month before.
  • The price-to-list index, which measures how close homes are sold to their final price, fell 97.9% from 100.1% a year ago. it was earlier. That is the lowest level since March 2020.

To read the full report, including more information, charts and methods, click here.

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