Housing market conditions ease as listings rise, Redfin finds

The housing market logjam appears to be breaking as falling mortgage rates during November encouraged more existing homeowners to list their property for sale, to the largest level in over a year, Redfin found.

Pending home sales also rose to their highest since the summer of 2022, Redfin found. The National Association of Realtors' separate pending sales data for October showed it was the lowest on record.

This data preceded the recent decision by the Federal Open Market Committee to cut short-term rates next year. That development is considered good news for loosening housing conditions.

The latest Freddie Mac Primary Mortgage Market Survey was 6.95%, the first time since August it was below 7%. While that is still above the rate many existing homeowners have, those with a reason to relocate are seeing an opportunity to get into the game.

"Buyers and sellers are learning to live with uncertainty," said Shay Stein, a Redfin real estate agent from Las Vegas, in a press release. "They've realized no one has a crystal ball that can predict exactly when mortgage rates will fall back to 5%, so they're making moves now because they can only wait so long to be near their grandkids, live in an RV like they've always dreamt of or finalize their divorce."

Compared with November 2022, new listings rose by a scant 0.1% on a seasonally adjusted basis to 504,263 units, but that was the first year-over-year increase in over a year-and-one-half, Redfin said. It is also 1.3% higher than October.

Pending sales on a seasonally adjusted basis rose 2% from October to 406,687 units. But this was 0.1% lower than November 2022's total, Redfin noted.

But the dark cloud over the market remains canceled sales, whose share reached a new high in November, at 16.9% of all transactions. This compared with 16.8% in October and 15.6% during November 2022.

But the 18.7% of listings with a price drop in November was 1.3 percentage points lower than October and down by 0.7 percentage points versus November 2022.

Both sides in the transaction are finally "living in the same reality," Stein said.

"A year ago, sellers had trouble understanding why they weren't getting $20,000 over the list price like their neighbor did during the pandemic homebuying boom. Now, they understand that to sell their home, they need to price it fairly and in some cases offer the buyer concessions like money toward closing costs or mortgage-rate buydowns."

Buyers are getting back into the market in December, a survey from MBS Highway of industry professionals found. Its National Housing Index rose 3 points from November to 34, driven by a 7 point rise in the buyer component.

"Our National Housing Index bottomed in January 2023, and then shot up as mortgage rates fell from above 7% to just below 6%, sparking a recovery in transaction volumes that was unfortunately short-lived," said MBS Highway CEO Barry Habib in a press release. "We expect to see a similar recovery in early 2024, but it should be more sustainable, with inflation continuing to ebb and the Fed closer to cutting rates than hiking them."