Lower Mortgage Rates Stimulate Existing-Home Market in November

Redfin reported on Friday (12-15-23) that new existing-home listings increased 1.3% month-over-month to the highest level since October 2022, on a seasonally adjusted basis, and 0.1% year-over-year—albeit a small gain but the first in a year and a half. Active listings, or the supply of homes for sale, grew 3.9% month-over-month—the largest increase since July 2022, although they fell 7.9% from a year earlier.

Pending home sales rose 2% month-over-month in November to the highest level in a year (seasonally adjusted) but fell 0.1% from a year earlier. Redfin says this was because both buyers and sellers are tired of waiting on the sidelines and mortgage rates ticked lower.

According to Redfin data, the median US sales price was $408,732 in November. Year-over-year, prices are up 3.7%, the largest jump since October 2022 but down 1.1% from October. Annual homes price growth seems to be normalizing after prices surged as much as 26% at the height of the pandemic homebuying boom before falling as much as 4% in 2023 due to elevated mortgage rates. Redfin notes that price appreciation is now back to the 2–7% range it was in prior to the pandemic.

On the downside of the housing data: Redfin is reporting that roughly 45,000 US home-purchase agreements were canceled in November, equal to 16.9% of homes that went under contract that month—the highest percentage in Redfin records that date back to 2017. That is up from 16.8% from one month earlier and 15.6% from one year earlier.