SEATTLE, WA — Recent data from Redfin indicates that U.S. pending home sales have remained stable compared to the previous year during the four weeks ending September 29. This marks the first time since January that pending sales have not experienced a decline. The stability in sales figures comes as mortgage rates have eased from the high levels seen last year.
In a shift from earlier in the year, pending sales increased year-over-year in 27 of the 50 largest U.S. metropolitan areas, the highest number since January. Phoenix leads the way with a 13% increase, followed by San Jose, CA, with 12%, and Portland, OR, with 10%. While these areas are seeing a rebound in homebuying demand, overall sales remain below pre-pandemic levels. In contrast, regions in Florida such as West Palm Beach, Fort Lauderdale, and Miami are experiencing significant declines in pending sales, attributed to climate-related challenges and rising costs.
Redfin’s Homebuyer Demand Index, which tracks home tours and other buying activities, rose by 9% month-over-month, reaching its highest point since April. Additionally, the number of mortgages locked in more than doubled by the end of September compared to the previous month, and mortgage-purchase applications saw a 10% month-over-month increase.
Lower housing costs are encouraging this renewed interest in homebuying. The average 30-year mortgage rate has dropped to 6.08%, its lowest in two years, reducing the typical homebuyer’s mortgage payment to $2,529. This represents a 5.9% year-over-year decrease, the largest since May 2020. A recent interest-rate cut by the Federal Reserve has further convinced many that mortgage rates have leveled off for now.
Declining mortgage rates are not only drawing buyers back into the market but are also motivating some homeowners to sell, leading to a steady rise in listings over the past year, with a recent increase of 4.3%.
“There’s no doubt demand has picked up since the Fed’s interest-rate cut; I’m seeing much more traffic at my listings,” said Max Shadle, a Redfin Premier agent in Phoenix. “But even though homes are selling, they’re still not typically getting multiple offers. Falling rates are an incentive for homeowners to sell, too, because they know demand is coming back and they feel less locked in by their relatively low rate. But many people still have an ultra-low mortgage rate from a few years ago, and they’re not quite ready to let go.”
As the housing market continues to adjust to these evolving conditions, both buyers and sellers are navigating a landscape of shifting rates and regional disparities.
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