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More house hunters are hitting the pavement as the new year starts, but pending home sales are down as daily average mortgage rates hit a seven-month high.
More house hunters are starting their home search as the new year kicks off. Redfin’s Homebuyer Demand Index–a seasonally adjusted measure of tours and other buying services from Redfin agents–posted a small 2% increase from a month earlier during the week ending January 5, and it’s also up 2% year over year.
There are several reasons a few more buyers are out there: Some have accepted high mortgage rates; daily average mortgage rates hit a seven-month high this week and they’re unlikely to decline significantly soon. Some are jumping into the market now that the holidays have passed and a new year has begun, and some are taking advantage of the fact that there are more homes on the market than there have been over the last few years.
“Three of the four offers my clients have made in the last week have competed against other offers with competitive terms, like waiving all contingencies and releasing earnest money early. Some homes are getting multiple offers within 24 hours of hitting the market,” said Emily Lam, a Redfin Premier agent in the Seattle area. “Some buyers are getting serious about their search because they’ve come to terms with 7% rates and they’re worried that if they wait longer, home prices will just keep rising. Others are starting their search in hopes that rates will decline soon. Either way, I’m advising buyers to get serious now because desirable listings will get more competitive as the year goes on.”
Nationwide, the small increase in tours hasn’t yet translated to an uptick in sales. Pending home sales fell 3.1% from a year earlier during the four weeks ending January 5, though that decline may be artificially large because we’re comparing to a period last year when mortgage rates posted a big drop, bringing a surge in demand.
On the selling side, new listings are down 2.5%, the biggest decline in over a year. But for the reason noted above, that drop may appear larger than it actually is. We’ll keep a close eye on pending sales and new listings over the next few weeks to determine whether more home tours eventually turn into more home sales, and whether more sellers start listing their homes as we get settled into 2025.
Remember, the perfect home is the one you perfect after buying it. By starting with an entry level home, move up or down, you have the opportunity to customize a home to your liking. With careful planning, budgeting, and a little bit of vision, you can turn a house that needs some love into your perfect home.
The DHC Group in San Diego is great at finding homes in every condition. They know the local market and can guide you to homes where smart upgrades can add value. With their help, you’re more likely to find a house that fits your total budget and has room for worthwhile improvements.
Bottom Line
In today’s market, where the cost of homeownership can be intimidating, finding the right home that fits your budget can feel like a real challenge. But if you’re open to putting in a little work and time, we can get you into your ideal home. Hennin Foreman and The DHC Group can help you explore what’s possible and find a place that’ll work for you.
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