As prices soared, inventory tightened, mortgage rates increased, and the number of pending home sales has declined.
The median sale price for U.S. homes spiked this month, the biggest uptick since October 2022. According to a new report from real estate site Redfin, median home prices rose 6.1 percent year-over-year to $362,725 in the four weeks ending on February 11. Along with housing costs, mortgage rates also bumped up.
The horizon, however, isn’t entirely rosy. The report showed that daily average interest rates clocked in at above 7 percent compared to the 6.6 percent they were sitting at earlier in the month, and pending home sales are down 7.3 percent year-over-year, the largest decline recorded in over four months.
“The Super Bowl is like Groundhog Day for real estate economists; we usually have a read on how the market is shaping up by the beginning of February, and the read this year is that it’s looking sluggish so far, mostly because of stubbornly high mortgage rates,” Redfin economic research lead Chen Zhao explained in the report.
“This week’s hotter-than-expected inflation report confirms that the Fed is unlikely to cut interest rates next month, which means mortgage rates will stay near 7 percent for now. Activity should pick up a bit in the spring, partly because it’ll be selling season and partly because people are getting more and more accustomed to elevated rates. We expect mortgage rates to start declining later in the spring as inflation eases and the Fed finally starts cutting interest rates.”
During those four weeks, there were two metros with the biggest year-over-year increase in median sales price. The first was Newark, New Jersey, where housing costs jumped 14 percent, and close behind was New Brunswick, New Jersey, which saw prices climb 13.8 percent. Miami, Florida, landed in third place with a 13.2 percent spike in property prices, followed by Anaheim, California, at 12.8 percent, and Warren, Michigan, at 12 percent.
Despite winter weather being a potential contributing factor in keeping would-be buyers on the sidelines, real estate pros are encouraging sellers to take advantage of the off-season and the low inventory of available homes. The market experienced an 8 percent increase in new listings compared to this time last year, the data showed. “A lot of sellers want to wait until spring, but I’m telling people to consider listing in the next few weeks because even though demand is fairly slow, there’s hardly anything else on the market,” said Christine Kooiker, a Redfin Premier agent from Grand Rapids, Michigan. “Buyers may want to act sooner rather than later, too, because prices will continue to go up. I have a few clients who waited to make an offer or made an offer that was too low, and now they regret it because a house they love got snatched up.”
Source: robbreport.com
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