Home Delistings Hit Record High in November as Buyers and Sellers Retreated
During the 12 weeks ending Nov. 20, a record 2% of U.S. properties for sale were delisted weekly on average, up from 1.6% the previous year. Since then, the amount has somewhat decreased, falling to 1.9% during the 12 weeks ending Nov. 27, including the Thanksgiving holiday. Redfin’s research of MLS data from 43 of the 50 most populated U.S. metropolitan areas—those with enough data—shows that this is the case.
Because they frequently receive no offers for the price they wish to sell for and occasionally no offers at all, sellers are pulling their properties off the market. This is due to a severe decline in demand from homebuyers brought on by rising mortgage rates and steadily rising housing prices. Although mortgage rates have significantly decreased since mid-November, this has not yet brought many buyers back into the market
Existing Housing Inventories at 7-Year High
As dropping rates enticed some buyers back in, Redfin, a Seattle-based brokerage, said its Homebuyer Demand Index increased last week. Yet, with the average home for sale staying on the market longer and the number of homes for sale continuing to climb, many prospective buyers are waiting for cheaper rates and prices.
Based on the report, the number of homes for sale increased by 15% annually during the four weeks that ended on Dec. 4. This is the most significant increase since at least 2015. However, the number of new listings decreased by more than 20%, indicating that more people are choosing to wait it out while looking for a home while mortgage rates and home prices continue to fall from their peaks.
However, as mortgage rates continued to fall from their peak in early November, the Redfin Homebuyer Demand Index recovered from its low point, rising 5% from a week earlier. The typical American homebuyer now pays around $50 less per month for housing, thanks to falling rates.
Among 11 of the 50 most populous U.S. metro areas, six of which are in California, home sale prices decreased from a year earlier. Prices in San Francisco dropped 7.8%, San Jose 3.6%, Los Angeles 2.2%, Detroit 1.4%, Sacramento 1.2%, and Pittsburgh 1.1%. In Oakland, Anaheim, Austin, Philadelphia, and Phoenix, they decreased by less than 1%.
Mortgage Rates Drop After CPI Report, Housing Market Still In Trouble
According to Mortgage News Daily, the 30-year fixed mortgage’s average rate decreased to 6.28% on Tuesday. It is presently at its lowest point since the middle of September. The dip happened after the consumer price index for November, a widely followed indicator of inflation, came in lower than predicted. Investors poured into the U.S. as a result of the report. Treasury bonds decreased yields. Mortgage rates roughly follow the yield on the 10-year Treasury.
Mortgage rates began to climb at the outset of this year and picked up speed in the spring and summer. By the end of October, the 30-year fixed rate had increased from about 3% to well over 7%, which caused an early deep freeze in the housing market. According to the most recent data from the National Association of Realtors, sales of existing houses have decreased for nine months and were down 24% in October compared to the same month last year.
But after the CPI report for October showed that inflation was slowing, rates then dropped significantly in November, which ended at a rate of 6.63%. Some speculated, if warily that the rate decrease may be luring buyers back into the market.
Next week’s potential market-moving reports are:
- Monday, December 19th – NAHB Home Builders’ Index
- Tuesday, December 20th – Building Permits (SAAR), Housing Starts (SAAR)
- Wednesday, December 21st – Consumer Confidence Index, Existing Home Sales (SAAR)
- Thursday, December 22nd – – Initial and Continuing Jobless Claims
- Friday, December 23rd – New Home Sales (SAAR), PCE Price Index
As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends. I welcome the opportunity to serve you in any way I possibly can. Please feel free to reach me at (800) 216-1047.