Redfin Report: The New Year Brings an Uptick in Early-Stage Demand As Mortgage Payments Fall and More Homes Hit the Market

As mortgage rates hold steady in the 6% range and new listings tick up, mortgage-purchase applications and Redfin home tours are rising

SEATTLE--(BUSINESS WIRE)-- (NASDAQ: RDFN) —Pending U.S. home sales posted their smallest year-over-year decline in two years (-3%) during the four weeks ending January 7, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.

Mortgage-purchase applications are up 3% from a month ago, and Redfin’s Homebuyer Demand Index—a seasonally adjusted measure of requests for tours and other buying services from Redfin’s agents—is up 5% from a month ago.

Redfin agents report that as the new year kicks off, more sellers are listing and more buyers are going on tours and applying for mortgages as rates remain in the mid-6% range, down from 8% in October. Buyers are motivated by lower mortgage payments–the median U.S. housing payment is down $327 (-12%) from October’s all-time high–and sellers are motivated by increased demand and the lock-in effect easing.

There are 9% more new listings than there were a year ago, and while the total number of listings is down 3% annually, that’s the smallest decline since June.

"More buyers are out there touring this week; they feel optimistic now that rates have come down a bit," said Phoenix Redfin Premier agent Heather Mahmood-Corley. "I'm advising house hunters to start making offers now because the market feels pretty balanced. Interest rates are lower and there are more listings, but there's not much competition yet. With activity picking up, I think prices will rise and bidding wars will become more common."

Leading indicators

Indicators of homebuying demand and activity
	Value (if applicable)	Recent change	Year-over-year change	Source
Daily average 30-year fixed mortgage rate	6.78% (Jan. 10)	Up just slightly from 6.72% a week earlier	Up from 6.14%	Mortgage News Daily
Weekly average 30-year fixed mortgage rate	6.62% (week ending Jan. 4)	Near lowest level since May	Up from 6.48%	Freddie Mac
Mortgage-purchase applications (seasonally adjusted)		Up 6% from a week earlier; up 3% from a month earlier (as of week ending Jan. 5)	Down 16%	Mortgage Bankers Association
Redfin Homebuyer Demand Index (seasonally adjusted)		Up 5% from a month earlier (as of the week ending Jan. 7)	Down 9%	Redfin Homebuyer Demand Index, a measure of requests for tours and other homebuying services from Redfin agents
Google searches for “home for sale”		Up 10% from a month earlier (as of Jan. 8)	Down 20%	Google Trends

Key housing-market data

U.S. highlights: Four weeks ending January 7, 2023 Redfin’s national metrics include data from 400+ U.S. metro areas, and is based on homes listed and/or sold during the period. Weekly housing-market data goes back through 2015. Subject to revision.
	Four weeks ending January 7, 2023	Year-over-year change	Notes
Median sale price	$363,125	4.1%	Close to the biggest increase since Oct. 2022
Median asking price	$364,725	4.9%
Median monthly mortgage payment	$2,399 at a 6.62% mortgage rate	7.4%	Down $327 from all-time high set during the four weeks ending Oct. 22. Near lowest level in about a year.
Pending sales	49,963	-2.5%	Smallest decline since Jan. 2022
New listings	44,682	9%
Active listings	775,467	-2.9%	Smallest decline since June
Months of supply	4.2 months	+0.3 pts.	4 to 5 months of supply is considered balanced, with a lower number indicating seller’s market conditions
Share of homes off market in two weeks	24.9%	Up from 24%
Median days on market	42	-2 days
Share of homes sold above list price	23.7%	Up from 22%
Share of homes with a price drop	3.9%	+0.4 pts.
Average sale-to-list price ratio	98.3%	+0.4 pts.

Metro-level highlights: Four weeks ending January 7, 2023 Redfin’s metro-level data includes the 50 most populous U.S. metros. Select metros may be excluded from time to time to ensure data accuracy.
	Metros with biggest year-over-year increases	Metros with biggest year-over-year decreases	Notes
Median sale price	West Palm Beach, FL (19.1%) Newark, NJ (17.6%) Anaheim, CA (16.4%) Boston (13.1%) Miami (12.2%)	Austin, TX (-3.3%) Fort Worth, TX (-3.2%) San Francisco (-2.5%) San Antonio, TX (-0.9%) Philadelphia (-0.1%)	Declined in 5 metros
Pending sales	Milwaukee, WI (12.3%) Austin, TX (10.6%) Dallas (10.2%) San Jose, CA (10%) Cleveland, OH (7.5%)	New York (-16.1%) Newark, NJ (-13.4%) San Diego (-12.2%) New Brunswick, NJ (-11.9%) Providence, RI (-10.9%)	Increased in 14 metros
New listings	Phoenix (21.6%) Austin, TX (20.3%) Nassau County, NY (19.2%) Minneapolis, MN (17.7%) Milwaukee, WI (17.6%)	Atlanta (-12.2%) San Francisco (-11.2%) Indianapolis, IN (-7.7%) Providence, RI (-6.5%) Newark, NJ (-6.5%)	Declined in 10 metros

To view the full report, including charts, please visit:
https://www.redfin.com/news/housing-market-update-new-listings-demand-up

About Redfin

Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, title insurance, and renovations services. We also run the country's #1 real estate brokerage site. Our home-buying customers see homes first with same day tours, and our lending and title services help them close quickly. Customers selling a home in certain markets can have our renovations crew fix up their home to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Customers who buy and sell with Redfin pay a 1% listing fee, subject to minimums, less than half of what brokerages commonly charge. Since launching in 2006, we've saved customers more than $1.5 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 4,000 people.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email press@redfin.com. To view Redfin's press center, click here.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240111614661/en/

Contact Redfin
Redfin Journalist Services:
Kenneth Applewhaite, 206-414-8880
press@redfin.com

Source: Redfin

Released January 11, 2024