Persistent market headwinds resulted in a sluggish starting to the yr, in response to Redfin. The standard days on market reached 54 days this month — the slowest tempo since 2020.
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Elevated mortgage charges and residential costs have introduced the market to a close to crawl, in response to Redfin’s newest market report.
The standard for-sale itemizing took 54 days to go beneath contract through the 4 weeks ending on Jan. 26 — the longest days on market common since March 2020. Slowing market exercise and pending residence gross sales (-9.4 p.c year-over-year) additionally pushed stock ranges up, with the months of provide reaching a six-year excessive of 5.2 months.
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“Sales are slow because it’s very expensive to buy a home, with mortgage rates sitting near 7 percent and home prices up 4.8 percent year over year,” the report learn. “The median monthly housing payment is $2,753, just shy of April’s record high. Additionally, extreme weather — including snow and frigid cold in the Midwest, South and Northeast and wildfires in Southern California — are keeping would-be buyers at home.”
Median residence value progress was highest throughout the Northeast and Midwest, with Pittsburgh (19.3 p.c), Milwaukee (16.7 p.c) Fort Lauderdale, Florida (14.2 p.c), Newark, New Jersey (13.4 p.c), and Cincinnati (11.7 p.c) posting double-digit beneficial properties in January. In the meantime, pending residence gross sales solely elevated in Portland, Oregon (9.7 p.c), and Milwaukee (2.6 p.c), with the opposite 48 largest markets within the U.S. posting annual declines.
Jordan Hammond | Credit score: Redfin
Regardless of January’s sluggish begin, Redfin Premier agent Jordan Hammond mentioned the approaching months would possibly spark extra exercise as homebuyers get bored with ready for decrease charges and residential costs to make a transfer.
“Prospective buyers have been cautious because they’ve seen homes sitting on the market and they’ve heard interest rates and prices may drop. When the market isn’t competitive, some buyers think they should wait for costs to go down,” she mentioned in a written assertion.
“Now it’s pretty clear that sellers aren’t slashing asking prices and mortgage rates aren’t plummeting, so mindsets are shifting. People are starting to believe that if they want or need to move, and they can afford to, they should do it.”
Hammond’s prediction comes after the Federal Reserve introduced it’s not reducing short-term charges, a transfer that can doubtless preserve mortgage charges elevated for the close to future.
“The Fed’s pause on rate cuts confirms what Treasury yields have been telling us — inflation risks are likely to keep mortgage rates high in the near term,” Fitch Rankings Senior Director Eric Orenstein mentioned in a earlier Inman article. “Mortgage refis could still pick up if long-term rates fall around 75 basis points, but there is clearly less momentum than there was even three months ago.”
