The housing market is seeing a resurgence as sinking mortgage rates unlock more inventory and sales
- Falling mortgage rates have driven buyers and sellers back to the market, Redfin said in a monthly report.
- November listings and pending home sales reached their highest in a year.
Shifting mortgage conditions have spurred a rebound in housing market activity, with listings and pending home sales touching their highest levels in over a year, Redfin said in its latest monthly report.
Rates on the 30-year mortgage — which underwent their largest plummet in a five-week period since late 2008 last month — have proved to be an encouraging sign for both buyers and sellers to step back into the market.
In November, total home listings saw their biggest increase since July 2022, growing 3.9% from the prior month. Meanwhile, newly added inventory climbed 1.3% month-over-month, topping the previous high in October 2022, on a seasonally-adjusted basis.
Demand is also rebounding, with pending home sales climbing 2% month-over-month, also reaching the highest level in a year.
"Another reason sales are ticking up is buyers and sellers are finally living in the same reality," Redfin Premier real estate agent Shay Stein said in the report, adding. "They understand that to sell their home, they need to price it fairly and in some cases offer the buyer concessions like money toward closing costs or mortgage-rate buydowns."
Median home prices in November stood at $408,732, a 1.1% drop month-to-month. At a range of 2%-7%, Redfin noted that home price growth appears to be normalizing since the pandemic buying spree, where prices ballooned as much as 26%.
Even before mortgage rates began moving down from near 8% levels at the end of October, a Bank of America survey found that a significantly lower number of consumers were willing to wait out the market.
Despite improving conditions, some homebuyers are getting cold feet, and November also saw a record high in canceled purchases.
But this could change as mortgage rates continue to drop — as of this week, the 30-year fixed mortgage rate is below 7% for the first time since August, and analysts believe it could move further into the 6% range as the Federal Reserve begins to loosen monetary policy.