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Redfin Reports Pending Home Sales Rise to Highest Level in a Year

November 17, 2023 8:00 AM

New listings were near their six-month high in October, helping drive an increase in pending sales, though buyers backed out of deals at the highest rate on record. The recent drop in mortgage rates could give sales another boost in November.

SEATTLE--(BUSINESS WIRE)-- (NASDAQ: RDFN) —U.S. pending home sales rose 1% month over month in October to the highest level in a year on a seasonally adjusted basis. That’s according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. They fell 4.8% from a year earlier, but that’s the smallest annual decline in almost two years.

Pending sales have been ticking up for several reasons:

“I’ve had a lot of sellers reach out to me recently saying they’re ready to list their homes—a reversal from recent months,” said Heather Mahmood-Corley, a Redfin Premier real estate agent in Phoenix. “Everyone has a different reason for relocating. One of my sellers is moving because she wants to buy her father’s house and he’s giving her a deal, which helps offset the higher mortgage rate she’ll take on. Another is moving to Florida with her sister because her husband passed away; she built up a lot of equity, so is able to pay in cash. Other people are selling because they want to live somewhere more affordable.”

October 2023 Highlights: United States

October 2023

Month-Over-
Month Change

Year-Over-
Year Change

Median sale price

$413,874

0.5%

3.5%

Pending sales, seasonally adjusted

400,648

1.0%

-4.8%

Homes sold, seasonally adjusted

398,537

-1.8%

-12.5%

New listings, seasonally adjusted

487,401

-0.2%

-4.5%

All homes for sale, seasonally adjusted (active listings)

1,412,404

1.4%

-12.5%

Months of supply

2.7

0.1

-0.1

Median days on market

34

1

-1

Share of for-sale homes with a price drop

20.8%

2.4 ppts

-0.9 ppts

Share of homes sold above final list price

31.6%

-1.7 ppts

2.7 ppts

Average sale-to-final-list-price ratio

99.3%

-0.2 ppts

0.5 ppts

Pending sales that fell out of contract, as % of overall pending sales

17.2%

1.2 ppts

0.6 ppts

Average 30-year fixed mortgage rate

7.62%

0.42 ppts

0.72 ppts

But Buyers Backed Out of Deals at the Highest Rate on Record

While pending sales have inched up in recent months, closed home sales have continued declining. In October, closed sales fell 1.8% from a month earlier and 12.5% from a year earlier, hitting the lowest level since the onset of the pandemic on a seasonally adjusted basis. That’s partly because many deals are falling through at the last minute.

Roughly 54,000 U.S. home-purchase agreements were canceled in October, equal to 17.2% of homes that went under contract that month—the highest percentage in Redfin records that date back to 2017. That’s up from 16.1% one month earlier and 16.6% one year earlier.

“I’m seeing a lot of cold feet,” said Redfin Tampa Sales Manager Eric Auciello. “Home prices are high, mortgage rates are high and insurance costs are high, and when buyers see the final number, a lot of them are backing out.”

Some buyers are also walking away when sellers refuse to fix issues that come up during the inspection, according to Mahmood-Corley.

“Buyers want turnkey houses because everything is so expensive now, whereas in 2021 and 2022, they felt lucky to get any house,” she said. “And while I’m seeing more sellers in the market, they’re squirrely too. They’re backing out when they don’t get the price they want.”

The cancellation rate could tick down in November as buyers take advantage of the decline in mortgage rates. The average 30-year-fixed mortgage rate fell to 7.44% this week, the lowest level since September.

Home Prices Climbed 4% From a Year Earlier

The median U.S. home sale price rose 3.5% year over year to $413,874 in October and was up slightly (0.5%) from a month earlier.

Prices were just 4.4% below their May 2022 record high of $432,732, in part because buyers are still competing for a limited number of homes, which is buoying prices; while listings have inched up in recent months, they remain historically low.

Metro-Level Highlights: October 2023

To view the full report, including charts, please visit:
https://www.redfin.com/news/housing-market-tracker-october-2023

About Redfin

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 also run the country's #1 real estate brokerage site. Our home-buying customers see homes first with same day tours, and our lending and title services help them close quickly. Customers selling a home in certain markets 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. Customers who buy and sell with Redfin pay a 1% listing fee, subject to minimums, less than half of what brokerages commonly charge. Since launching in 2006, we've saved customers more than $1.5 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 4,000 people.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email [email protected]. To view Redfin's press center, click here.

Redfin Journalist Services:

Kenneth Applewhaite, 206-588-6863

[email protected]

Source: Redfin

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