In a notable development for the real estate market, the number of new home listings has seen its second-largest annual growth since early summer, despite seasonal lulls typically associated with this time of year.
The data from the four weeks ending December 15 reveals a 7.6% increase in new home listings compared to the previous year. This represents the most significant rise since June, excluding a holiday-related spike in late November. Several factors are driving this trend. One primary driver is the rise in home prices, with the median U.S. home sale price climbing 6% year-over-year, marking the biggest jump since October 2022.
Increased consumer confidence following November’s election has also spurred sellers into action. Many homeowners are making the decision to sell, motivated by the belief that the current market conditions offer a favorable opportunity. Meanwhile, buyer interest continues to grow, with Redfin’s Homebuyer Demand Index—a measure tracking requests for property tours and other buying activities—showing a 9% increase compared to the previous year, approaching levels not seen since August 2023.
Mortgage-purchase applications have also exhibited substantial growth, increasing 18% from the previous month. Pending home sales, which climbed 4.1%, reflect a consistent upward trend in recent months. Buyers, encouraged by relatively low mortgage rates averaging 6.6%, seem to be more willing to proceed with purchases. Despite a slight uptick in daily average rates above 7% as of mid-December, the overall decline in rates over the preceding three weeks has reinvigorated buyer interest.
David Palmer, an agent in Seattle, highlights the active winter season, noting, “Buyers are coming out of the woodwork because they’ve accepted that rates in the 6% to 7% range are the new normal, and they know that if they wait to buy, mortgage rates will probably stay the same but prices will be higher.” This sentiment reflects a broader acceptance of current interest rates as part of the new financial landscape.
Market conditions also illustrate notable national and metro-level trends. Across over 400 U.S. metro areas, metrics indicate strengthening market conditions, with median sale prices up 6% and active listings rising by 11.6%. Conversely, the time taken for homes to leave the market has extended to 44 days on average, while the proportion of homes sold above list price has decreased to 23.9%.
Regionally, areas like Warren, MI, and Milwaukee are experiencing double-digit growth in median home sale prices, with other metros like Tampa, FL showing declines. Likewise, pending sales are surging in cities like Jacksonville, FL, and San Jose, CA, whereas they have decreased in locations such as Warren, MI and San Diego.
In summary, the housing market shows significant shifts as sellers capitalize on high prices and robust buyer demand. With mortgage rates stabilizing and consumer confidence on the rise, this trend of increased listings and sales activity is expected to continue into the foreseeable future.
Source: Redfin
