The housing market is beginning to stir as the year progresses, with more and more individuals searching and touring properties, according to a report issued by Redfin.
What Happened: As the allure of low mortgage rates takes hold, purchases are starting to follow suit. Applications for mortgages have seen a boost of 25%, and the previously sluggish pace of pending sales is starting to ease.
The median cost of a home in the U.S. has seen a slight increase of 0.9%, bringing the average sale price to $350,250 over the past month. However, this can be attributed to the growing interest in buying as mortgage rates continue to drop, thanks in part to inflation continuing to moderate.
As the week of Jan. 20 comes to a close, average mortgage rates have hit a new low, 6.15%, since September, further fueling the fire for potential buyers.
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While pending home sales dropped by 29% compared to last year, this marks the first time in three months that the decline has been less than 30%.
This, coupled with the 25% rise in mortgage purchase applications during the week of Jan. 13th, indicates that we can expect to see more pending sales in the near future.
Why It Matters: As the demand for homes begins to rise again, some homeowners are becoming more willing to put their properties on the market, according to the report. New listings of homes for sale have dropped by 20% compared to last year, marking the smallest decline in two months.
Google searches for "homes for sale" were up nearly 50% from their November lows. Though, searches are still down 26% from the previous year. These figures suggest that while interest in buying homes is on the rise, it still has a ways to go to reach pre-pandemic levels.
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