It’s not every day Redfin reports signs of a housing market recovery. And while the report highlights the differences between today’s housing market and the low point it reached in the second week of November, it corroborates testimonies from agents in the field.
So, no, as Redfin’s economists pointed out, we’re not out of the woods just yet. But there’s more to these signs of recovery than a few more buyers jumping back into the market.
Here’s what you need to know.
HOME BUYER ACTIVITY IS UP
The number of Redfin.com users requesting first home tours has increased 17% from its trough in November. And the number reaching out to Redfin agents to start the home buying process has gone up 13%.
Those numbers are down 23% and 27%, respectively, compared to a year ago, but they’re up significantly from November when both show annual declines of 40%.
Redfin agents are reporting an increase in sales, with some markets continuing to see bidding wars.
Home buyer demand is still lower than it was in early 2022, but the housing market has shifted into a new and more welcoming phase. Well-priced listings are getting more offers more quickly.
POWER DYNAMICS SHIFT IN FAVOR OF HOME BUYERS
Just as Byron Lazine and Nicole White noticed in their markets, more home buyers are entering the market, acclimated to the 6% mortgage rates. Some are even getting rates in the high 5s, but even 6s are a relief after rates soared into the 7s last fall.
This new phase of the market is also a more buyer-friendly one, which has many agents wondering how to articulate the unique buying opportunity explained in a recent BAM webinar with Byron Lazine and KCM President David Childers. (Read the full breakdown here.)
Some buyers who can’t get a rate in the 5s are exploring other ways to lower their mortgage rates:
- Opting for an adjustable-rate mortgage
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Asking for and getting a rate buydown as a concession from the seller or builder
Redfin agents are seeing more homes go under contract in January than in the entire fourth quarter of 2022. Listings that sat on the market last November and December are suddenly getting offers.
Mortgage applications have increased 28% from early November 2022, thanks to the 30-year fixed mortgage rate’s decline from 7.08% to 6.15%, marking the steepest 10-week decline since 2009. That drop has shaved 10% or about $180 from the typical buyer’s mortgage payment.
Pending home sales increased by a seasonally-adjusted 3% month over month in December, the first such increase in 14 months.
In some markets, buyers are even getting homes for under the asking price. In others, the market is favoring sellers, with homes getting multiple offers.
THE RETURN OF BIDDING WARS
Jan 27, 2023
