Housing Inventory Hits Five-Year High MABA MassachusettsRealEstate FirstTimeHomeBuyers MaBuyerAgent

According to a new report from Redfin, homebuyers have the most options since 2020, but few are biting because rising housing costs have made monthly payments tough to swallow. Redfin found that pending home sales in January fell to the lowest level on record aside from the start of the pandemic. Pending home sales dropped four point two percent month-over-month—the largest decline on a seasonally adjusted basis reported since August 2023—and six point three percent year-over-year.

Active listings of homes for sale rose to the highest level since early in the pandemic. They climbed point three percent month-over-month on a seasonally adjusted basis in January and twelve point nine percent year-over-year. New listings hit the highest level since July 2022, increasing one point nine percent month-over-month, and four point seven percent year-over-year.

Redfin cited a number of reasons for this increase in the nation’s housing inventory, including:

• The mortgage rate lock-in effect is fading: A number of homeowners who scored low mortgage rates during the pandemic have been staying put because moving would mean taking on a higher rate. But most people can’t stay put forever.
• Homes are lingering on the market: The typical home that sold in January was on the market for 56 days. That’s a week longer than a year earlier, marking the longest period for any January since 2020.
• Demand is slowing: Listings are also piling up because there are fewer people buying homes. Existing home sales fell one point seven percent in January to a seasonally adjusted annual rate of four point three million—the largest monthly decline since October 2023.

Redfin cited a number of reasons for this dip in housing sales, including:

• Mortgage rates hit an eight-month high: As the third quarter brought with it a drop in mortgage rates, 2024 closed with the thirty-year fixed-rate mortgage rate edging toward the seven percent mark. The average interest rate on a thirty year-fixed mortgage was six point ninety six percent in January, up from six point seventy two percent a month earlier and the highest level since May. Plus, the median home sale price rose four point one percent from a year earlier to four hundred eighteen thousand five hundred and eighty one dollars. That’s forty five percent higher than the January before the pandemic.
• Deals are falling through: Home purchases were canceled at the highest January rate in records dating back to 2017. Roughly forty one thousand home-purchase agreements were canceled, equal to fourteen point three percent of homes that went under contract last month. That’s up from thirteen point four percent a year earlier.
• Economic uncertainty: With tariffs, reductions in the federal workforce, return to office mandates, and mortgage rate uncertainty, a lot is up in the air for a lot of Americans right now, and Redfin agents report this is giving buyers (and sellers) cold feet.

“I’m seeing a lot more inventory hit the market than I have in past years, but it’s not nearly enough,” said Charles Wheeler, a Redfin Premier Real Estate Agent in San Diego. “Economic fears have been top of mind for people. I have sellers saying, ‘I think we’re at the top of the market—I’m ready to cash out and put my money into another investment.’ Buyers should know that they have a bit more negotiating power because there are more homes hitting the market. Sellers should know that since buyers have more negotiating power, they should make sure their home is polished and competitively priced if they want to sell it quickly.”

January 2025 Housing Market Highlights: United States

Metro-Level Highlights: January 2025

• Prices: Median sale prices rose most from a year earlier in Pittsburgh (fifteen point four percent); St. Louis (thirteen point two percent); and Anaheim, California (thirteen point one percent). They fell in four metros: Tampa, Florida (negative four percent); Austin, Texas (negative three point seven percent); San Francisco (negative two point two percent); and Jacksonville, Florida (negative one point three percent).
• Pending sales: Pending sales rose most in Portland, Oregon (eleven point four percent); San Jose, California (eight point two percent); and Milwaukee (four point seven percent). They fell most in Detroit (negative nineteen point two percent); Miami (negative eighteen point one percent); and Atlanta (negative seventeen point four percent).
• Closed home sales: Home sales rose most in Portland, Oregon (twelve point eight percent); Providence, Rhode Island (10%); and Boston (nine point nine percent). They fell most in Detroit (negative eleven point three percent); Miami (negative nine point four percent); and Fort Lauderdale, Florida (negative eight point two percent).
• New listings: New listings rose most in Seattle (thirty point eight percent); Oakland, California (twenty seven point seven percent); and Sacramento, California (twenty five percent). They fell most in Kansas City, Missouri (negative eleven point two percent); Detroit (negative nine point one percent); and Pittsburgh (negative eight point four percent).
• Active listings: Active listings rose most in Oakland (thirty one point one percent); Seattle (twenty nine point one percent); and Cincinnati (twenty eight point one percent). They fell in six metros, with the largest declines reported in New York (negative point nine percent); Newark, New Jersey (negative one point nine percent); and Chicago (negative one point five percent).
• Homes sold above list price: In Newark, fifty six point seven percent of homes sold above their final list price, the highest share among the metros Redfin analyzed. Next came San Jose (fifty two point seven percent); and Nassau County, New York (forty nine percent). The lowest shares were in West Palm Beach, Florida (five point five percent); Fort Lauderdale (five point nine percent); and Miami (seven point five percent).

Click here for more on Redfin’s analysis of January 2025 home sale trends.

The post Housing Inventory Hits Five-Year High first appeared on The MortgagePoint.

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