Pending home sales drop to lowest level in seven years MABA MassacusettsRealEstate FirstTimeHomeBuyers MassBuyerAgents

 Pending home sales dropped to the lowest level since at least 2015, according to a new Redfin report. Redfin attributes the drop to the record high mortgage rates, recession concerns, record low inventory, extreme winter weather and the holiday slowdown. Nationally, sales fell thirty two percent from last year, during the four weeks ended January 1, with the biggest declines in Las Vegas, Phoenix and Austin, where pending sales fell more than fifty percent. The report found early-stage demand to be a mixed bag. Its Homebuyer Demand Index, which measures requests for tours and other services, was up eight percent from two weeks prior, while mortgage applications dropped twelve percent, although Redfin attributed that to the late December storms that plagued the country.

 Shoshana Godwin, a Redfin agent in Seattle, said right now there are two types of buyers in the market: first-time homebuyers hoping for more manageable prices and competition than we’ve seen over the past few years and returning buyers who took a break during the pandemic driven bidding wars. “They should be able to take their time and find a home for a slightly lower price than last year, but the market will likely become more competitive over the next few months,” Godwin said. “I expect new listings to remain scarce as homeowners hold onto low interest rates while the pool of determined buyers circle the few homes that are available.”
And it wasn’t just pending sales that fell, home prices also dropped.

 During the four weeks ended January 1, home prices fell from 2021 in nineteen of the fifty most populous U.S. metros, the report found. There was a ten point four percent year-over-year drop in prices in San Francisco, a six percent  drop in Sacramento, five point six percent in San Jose, California, five point four percent in Los Angeles, four point six percent in Detroit, four point four percent in Oakland, California, four point two percent in Seattle, three point nine percent in Pittsburgh, two point nine percent in Austin, Texas, two point eight percent in New York, two point four percent in Phoenix and two point two percent in Boston, Ma. Home prices fell two percent or less in Anaheim, California, Chicago, Riverside, California, Washington, D.C., San Diego, Portland, Oregon and Newark, New Jersey.

 Thirty-year mortgage rates rose to six point forty eight percent for the week ending January 5. The daily average, according to the report, was six point forty one percent on January  5. Meanwhile, mortgage applications were down twelve percent from two weeks prior and purchase applications were down forty two percent from 2021. The median asking price of a home rose point five percent from 2021 to $350,000, the slowest growth rate on record. Meanwhile, the median sale price increased three point one percent year over year to $346,535. With the higher rate, the average monthly mortgage payment on a median-priced home was $2,254, down slightly from the previous week and down $253 from its October peak. Year over year, mortgage payments are up thirty six point two percent.

 Pending home sales fell thirty one point seven percent from last year, the eleventh straight four-week period of declines and again marking the largest decline since January 2015. During the week ended December 31, Redfin found Google searches for “homes for sale” rose from its November low but were down thirty three percent from last year. In the four weeks ended January 1, active listings rose eight teen point six percent from last year, marking the biggest annual increase since 2015. Meanwhile, new listings fell twenty two point four percent from last year, the biggest drop on record.

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