Pending U.S. home sales decreased 32% year over year to their lowest level since at least 2015 during the four weeks ending January 1, according to data issued by Redfin..
The decline is due to buyers being deterred by persistently high home prices and mortgage rates.
Redfin's seasonally adjusted Homebuyer Demand Index showed a range of results in December.
Mortgage purchase applications decreased by around 12%, while the brokerage noted that the double-digit decline was partially caused by severe storms that affected nearly every region of the U.S. in late December.
What Kind Of Buyers Are On The Market?
Shoshana Godwin, a Redfin agent in Washington said, “First-timers hoping prices and competition are more manageable than they have been over the last few years, and returning buyers who took a break after losing out on multiple homes during the pandemic bidding-war frenzy.”
According to Redfin, during the week ending Dec. 31, Google searches for "homes for sale" started to increase from the low reached in November, but were still down roughly 33% from a year earlier.
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“[Those buyers] 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.
Where Are Home Prices Falling?
During the four weeks that ended Jan. 1, the average U.S. home sold for $350,000.
That represents a 0.5% increase from a year earlier, which is less than the 0.7% growth we observed at the start of the pandemic. Prices are down 10% from the peak seen in June.
On a regional basis, during the four weeks that ended Jan. 1, home sale prices decreased year over year in 19 of the 50 most populous U.S. metros.
Only 10 urban areas, in contrast, experienced price drops one month earlier.
Prices fell most in the following areas:
San Francisco, CA: 10.4% year over year
Sacramento, CA: 6%
San Jose, CA: 5.6%
Los Angeles, CA: 5.4%
Detroit, Michigan: 4.6%
Oakland, CA: 4.4%
Seattle, CA: 4.2%
Pittsburgh, PA: 3.9%
Austin, TX: 2.9%
New York City, NY: 2.8%
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