U.S. Housing Market’s Resilience Shines Amid Year-End Pending Sales Decline
In the closing days of 2023, the U.S. housing market showcased an unexpected resilience, as pending home sales experienced only a modest 4% year-over-year decline during the four weeks ending on December 24, as reported by the real estate brokerage Redfin. This decline represents the smallest drop since March 2022, hinting at a potential easing of the recent housing market slowdown.
Despite a slight uptick in the daily average 30-year fixed mortgage rate, rising to 6.61% on December 27 from 6.50%, it was still the lowest level observed since May. The weekly average for the same period also showed a slight increase, reaching 6.67% from 6.27%, marking the lowest level since June. Mortgage purchase applications saw a marginal 1% decline from the previous week but remained up by 7% compared to a month earlier.
Interestingly, the Redfin Homebuyer Demand Index, which measures requests for property tours and other homebuying services facilitated by Redfin agents, surged by 6% over the past month. Simultaneously, Google searches for “homes for sale” increased by 8% during the same period.
The median sale price for the four weeks ending December 24 reached $364,250, marking a significant 4.5% increase compared to the previous year, the most substantial rise since October 2022. Similarly, the median asking price experienced a similar uptick, reaching $363,484, indicating a 5.1% increase.
New listings saw a substantial surge, with a notable increase of 12.2%, the highest growth rate since June 2021. Active listings, on the other hand, declined by only 3.8%, the smallest decrease since June. Additionally, the share of homes sold above the list price rose to 25% from 23%.
However, it’s essential to note that regional disparities were evident within these positive trends. For example, median sale prices surged significantly in Anaheim, CA (18.2%), Newark, NJ (17%), and Fort Lauderdale, FL (13.6%), while experiencing declines in Austin, TX (-4%), Fort Worth, TX (-2.2%), and San Francisco (-1.1%). Likewise, pending sales increased notably in Dallas (8.5%), Milwaukee (8.4%), and Austin (5.1%), but decreased in Providence, RI (-15.2%), Virginia Beach, VA (-10.6%), and Jacksonville, FL (-10.2%).
