Housing Market Update: More People Are Touring Homes, But That Hasn’t Yet Translated to More Sales

by Real estate financingMission+
9 minutes read

Redfin’s Homebuyer Demand Index, which measures requests for home tours and other services from Redfin agents, is ticking up as the spring home-selling season draws nearer. That hasn’t yet converted to a meaningful improvement in pending sales–but Redfin agents expect it will in the next few months.

Some house hunters are dipping their toes back into the market after harsh winter weather froze them out at the start of January. Redfin’s Homebuyer Demand Index–a measure of requests for tours and other buying services from Redfin agents–rose 6% from a week earlier during the week ending January 28, and a separate measure of showings also signals they’ve ticked up over the last week. 

More buyers are touring homes because mortgage rates are holding steady below 7%, down from 8% this past October, and some buyers are worried prices will increase more if they wait longer. Sale prices rose 5.5% year over year during the four weeks ending January 28, the biggest increase in over a year. 

But that earliest-stage demand hasn’t yet translated into home sales. Mortgage-purchase applications declined from a week earlier and pending sales posted their biggest year-over-year decline in four months, likely reflecting tepid early-stage demand during the middle of January. Home tours and other actions buyers typically take before applying for a mortgage was lower than expected in mid-January as daily average mortgage rates inched up from their December low point and severe weather kept many would-be buyers at home. 

Redfin agents expect the increase in tours to convert into an improvement in pending sales over the next few months. That’s partly because of typical seasonality: Home listings and sales usually pick up as spring approaches. 

“I thought declining mortgage rates and more inventory would cause the market to take off right at the start of the new year. But even though demand has picked up some, I’m not wowed,” said Hal Bennett, a Redfin Premier agent in the Seattle area. “Now I believe this year’s market will launch in the spring, once 6% rates are even more entrenched in buyers’ psyches and more homeowners list their houses.” 

This week’s economic news suggests that mortgage rates are unlikely to meaningfully fall in the next few months. At its press conference on January 31, the Fed signaled they’re unlikely to cut interest rates in March, which will probably keep mortgage rates elevated near their current level into the spring, though Redfin economists still expect them to gradually decline by the end of the year. 

Leading indicators

Indicators of homebuying demand and activity
Value (if applicable) Recent change Year-over-year change Source
Daily average 30-year fixed mortgage rate 6.75% (Jan. 31) Down from 6.95% a week earlier Up from 6.17% Mortgage News Daily 
Weekly average 30-year fixed mortgage rate 6.69% (week ending Jan. 25) Up from 6.6% a week earlier, but near lowest level since May Up from 6.13% Freddie Mac
Mortgage-purchase applications (seasonally adjusted) Down 11% from a week earlier; up 10% from a month earlier (as of week ending Jan. 26) Down 20% Mortgage Bankers Association
Redfin Homebuyer Demand Index (seasonally adjusted) Down 3% from a month earlier (as of week ending Jan. 28) Down 17% Redfin Homebuyer Demand Index, a measure of requests for tours and other homebuying services from Redfin agents
Google searches for “home for sale” Up 25% from a month earlier (as of Jan. 27) Down 16% Google Trends 
Touring activity Up 9% from the start of the year (as of Jan. 30) At this time last year, it was up 5% from the start of 2023 ShowingTime, a home touring technology company 

Key housing-market data

U.S. highlights: Four weeks ending January 28, 2024

Redfin’s national metrics include data from 400+ U.S. metro areas, and is based on homes listed and/or sold during the period. Weekly housing-market data goes back through 2015. Subject to revision. 

Four weeks ending January 28, 2024 Year-over-year change Notes
Median sale price $361,245 5.5% Biggest increase since Oct. 2022
Median asking price $392,349 7% Biggest increase since Sept. 2022
Median monthly mortgage payment $2,595 at a 6.69% mortgage rate 12.3% Down roughly $120 from all-time high set in October 2023, but up roughly $250 from the four weeks ending Dec. 31
Pending sales 62,501 -8.5% Biggest decline since October 2023
New listings 65,722 4.9%
Active listings 743,508 -3.8%
Months of supply  4.8 months +0.2 pts.  4 to 5 months of supply is considered balanced, with a lower number indicating seller’s market conditions. 
Share of homes off market in two weeks  30% Up from 29%
Median days on market 47 -2  days
Share of homes sold above list price 22.8% Up from 21%
Share of homes with a price drop 5.2% +0.3 pts. 
Average sale-to-list price ratio  98.2% +0.5 pts. 

 

Metro-level highlights: Four weeks ending January 28, 2024

Redfin’s metro-level data includes the 50 most populous U.S. metros. Select metros may be excluded from time to time to ensure data accuracy. 

Metros with biggest year-over-year increases Metros with biggest year-over-year decreases Notes

Median sale price

Anaheim, CA (15.6%)

Miami (14.7%)

New Brunswick, NJ (13.3%)

West Palm Beach, FL (12.9%)

Detroit (11.8%)

Austin, TX (-5.6%)

San Antonio, TX (-2.1%)

Declined in 2 metros 
Pending sales San Francisco (11.5%)

San Jose, CA (10.9%)

Anaheim, CA (1.7%)

Portland, OR (-31.2%)

San Antonio, TX (-31%)

Denver (-30.6%)

Nashville, TN (-18.7%)

New Brunswick, NJ (-17.6%)

Increased in 3 metros
New listings Fort Lauderdale, FL (26.5%)

Phoenix (23.1%)

San Diego, CA (22.6%)

Miami (22.3%)

Minneapolis, MN (19.9%)

Denver (-20.8%)

Chicago (-18.7%)

Atlanta (-15.9%)

Portland, OR (-10.5%)

Nashville, TN (-9.8%)

Declined in 16 metros

Refer to our metrics definition page for explanations of all the metrics used in this report.

Source

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