US Pending Home Sales Declined in December, Redfin Reports

On Friday, Redfin reported that according to its latest data, pending home sales fell 4.5% in December on a seasonally adjusted basis—the largest decline since October 2022. Year-over-year, sales were down 2.3%.

Redfin notes that homebuyer demand declined at year-end as mortgage rates rose. After easing slightly early in December, rates began climbing mid-month, driven partly by the Federal Reserve’s projection of fewer 2025 interest-rate cuts than expected. The weekly average for a 30-year fixed mortgage now stands at 7.04%—the highest since May 2024 and up from an early-December low of 6.6%.

Home purchases fell through at the highest December rate on record, which likely contributed to the decline in pending sales, Redfin said. Nearly 40,000 home-purchase agreements were canceled in December, equal to 16.2% of homes that went under contract that month. That’s the highest December percentage in records dating back to 2017 and is up from 15.1% a year earlier.

Commenting on the report, Redfin Senior Economist Elijah de la Campa said:

“Homebuying activity will likely slow further in January due to the wildfires impacting Los Angeles—the nation’s second most populous metro area—and winter storms impacting the Mid-Atlantic and Southeast. Rent prices, on the other hand, may tick up as people who have been displaced by the fires seek alternative housing.”