A surge in mortgage rates in early November caused sales and prices to slow, but there are early signs that demand may be creeping back as rates reverse course
SEATTLE– (NASDAQ: RDFN) — Home sales fell 35.1% year over year in November on a seasonally-adjusted basis, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. That is the largest decline in Redfin’s records that date back to 2012.
Home-price growth also lost momentum. The median U.S. home-sale price rose just 2.6% from a year earlier, the smallest gain since May 2020, when the onset of the coronavirus pandemic brought the housing market to a near halt.
The housing market continued to cool in November as elevated housing costs kept buyers and sellers on the sidelines. New listings slumped 28.4% year over year, the biggest drop on record aside from April 2020. Despite the decrease in listings, overall supply rose 4.6% from a year earlier—a sign that homes lingered on the market as demand ebbed. Indeed, the typical for-sale home took 37 days to go under contract, up from 23 days a year earlier.
But there are early signs that demand may be starting to creep back as mortgage rates fall. There was a slight downtick in the portion of home-purchase agreements that were canceled in November, and mortgage applications and Redfin’s Homebuyer Demand Index have both been on the rise. Still, these early indicators haven’t translated into more home sales.
“The worst of inflation is likely in the rearview mirror,” said Redfin Economics Research Lead Chen Zhao. “We do anticipate that mortgage rates will decline slightly further in 2023 as the Fed’s actions continue to bring inflation down, which should ultimately bring more homebuyers back to the market. Still, we have a ways to go until we reach recovery mode, and we may see sales continue to ebb in the short term.”
Zhao continued: “Prospective buyers in places like San Francisco and Austin, where prices have already fallen from a year ago, should pay close attention to a potential turnaround; it could be the time to take action as demand and competitive offers could pick up in the coming months.”
|November 2022||Month-Over-Month |
|Median sale price||$393,682||-1.5%||2.6%|
|Homes sold, seasonally-adjusted||420,213||-5.5%||-35.1%|
|Pending home sales, seasonally-adjusted||388,608||-2.8%||-35.4%|
|New listings, seasonally-adjusted||467,945||-4.3%||-28.4%|
|All homes for sale, seasonally-adjusted||1,511,555||0.6%||4.6%|
|Months of supply||2.7||0.1||1.3|
|Median days on market||37||2||15|
|Share of for-sale homes with a price drop||20.8%||-1.8 ppts||10.8 ppts|
|Share of homes sold above final list price||26.4%||-2.7 ppts||-18 ppts|
|Average sale-to-final-list-price ratio||98.5%||-0.4 ppts||-2.2 ppts|
|Share of home offers written by Redfin agents that faced competition (seasonally adjusted)||40.4%||-3.5 ppts||-26.9 ppts|
|Pending sales that fell out of contract, as % of overall pending sales||16.8%||-0.4 ppts||4.7 ppts|
|Average 30-year fixed mortgage rate||6.81%||-0.09 ppts||3.74 ppts|
|Note: Data is subject to revision|
- Home sales: Pandemic boomtown Las Vegas saw the biggest drop in home sales, down 51.8% year over year in November. Next came San Jose, CA (-50.1%), Salt Lake City (-49.9%), Stockton, CA (-49.8%) and Oxnard, CA (-48.7%).
- Prices: Eleven metros saw year-over-year declines in median sale prices, with San Francisco leading the drop (-11.1%). It was followed by San Jose, Detroit, Pittsburgh and Boise, ID, all down between 2% and 3%.
- Supply: Pandemic boomtowns North Port, FL and Tampa led the increase in the number of homes for sale, with active listings rising 61.3% and 46.1%, respectively. Next came Nashville, TN (45.1%), New Orleans, LA (40.2%) and Seattle (39.2%). Florida metros likely topped the list because Hurricane Ian drove people to sell their homes; North Port and Cape Coral, another area hit by the storm, were the only two metros where new listings rose on a monthly basis in November.
To view the full report, including charts, additional metro-level data on competition and home-purchase cancellations, as well as methodology, please visit: https://www.redfin.com/news/housing-market-tracker-november-2022
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 sell homes for more money and charge half the fee. We also run the country’s #1 real estate brokerage site. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home 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. Since launching in 2006, we’ve saved customers more than $1 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 5,000 people.
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