Homebuyer demand stabilizes as mortgage rates dip MABA Massachusetts FirstTimeHomeBuyers RealEstate

 Homebuyer demand is starting to stabilize as October home sales posted the largest decline since 2015, according to a new Redfin report. Areas across the country, like Las Vegas, Miami and Phoenix, which saw significant growth during the pandemic, had declines of fifty percent, the report found, as a record number of sellers dropped their home prices last month. Redfin found several key measures indicating the stabilization of homebuyer demand, as mortgage rates fell slightly below seven percent in the last week of October, including declines in Google searches for “homes for sale,” its Homebuyer Demand Index, mortgage applications and pending sales.

 Redfin deputy chief economist Taylor Marr said this week that we’re seeing a light at the end of the tunnel from the Fed slowing the pace of interest rate hikes, but “the tunnel’s exit may be more dreadful than expected.”  “There is also a glimmer of hope in the data that buyers stopped leaving the market as mortgage rates leveled off this week, but we’re still deep in a market that is coping with the pains of higher mortgage rates,” Marr said. “Mortgage rates may take longer to come down than many have expected, which means housing trends could continue to worsen as the economy adjusts to higher rates.  If last year’s housing market was as overheated as Chair Powell stated on Wednesday, then record growth in rates was like a bucket of water poured on the flames to bring it into balance.

 It may take some time for the smoke to clear to see where things stand next year.” Redfin said its agents in the Midwest and Mountain West are seeing more activity from first-time and budget-restricted buyers, who have begun returning to the market while taking advantage of not having to rush to make a purchase and being more “choosy” about their decisions. In the week ending Nov. 3, pending home sales fell thirty three percent from last year, marking the largest decline since January 2015, yet for the week ending Oct. 30, they were up slightly from the previous week, marking the first increase in two months. Mortgage rates fell to six point ninety five percent in the week ending Nov. 3.

 Meanwhile, mortgage applications fell one percent during the week of Oct. 28, down just one percent, which the report noted was the smallest week-over-week decline in five weeks. Purchase applications were also down, falling forty one percent from last year.  Redfin found fewer Google searches for “homes for sale” during the week ended Oct. 29, down thirty two percent from last year, but up a point from the week prior.  Its Homebuyer Demand Index, which measures requests for tours and other services, was down thirty three percent from last year. In the four weeks ended Oct. 30, active listings rose seven point four percent from last year and were up from seven percent in the previous period, the largest increase in six weeks, while new listings fell one hundred and eighty five from last year.

 The median asking price rose seven percent from 2021 to three hundred seventy three thousand seven hundred and twenty five hundred dollars but was down seven percent from its May record high of three hundred ninety nine thousand nine hundred and seventy five dollars. Meanwhile, the median sale price increased four percent year over year to three hundred sixty thousand eight hundred and sixty one dollars. ​​Thirty-four percent of homes that went under contract had an offer within the first two weeks, showing little change from the previous four weeks but down from forty percent last year. 

 Twenty-eight percent of homes sold above list price, down from forty three percent last year and the lowest since July 2020.The report also noted the monthly mortgage payment on a median asking-price home was two thousand five hundred and twenty four dollars at the current six point ninety five percent mortgage rate. That was up forty eight percent from last year’s one thousand seven hundred and three dollars when mortgage rates were three point nine percent, yet up from August’s low of two thousand and two hundred and three dollars.

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