According to recent data, pending home sales increased by 3% in December, marking the first monthly gain since October 2021. However, new listings have seen a significant decline, with a drop of 26.8% year over year in December, the most significant decline since the beginning of the pandemic. This decline in new listings is likely due to homeowners holding onto their low mortgage rates and needing more time to sell in a still-slow market.
–
Seasonally adjusted pending home sales rose by 2.9% nationwide in December, the first month-over-month increase since October 2021. Pending sales have declined year over year, but the decline has eased for the first time in 10 months, with a 30.9% decline compared to a 35.1% decline in November. However, closed home sales have also declined, with a 33% decrease from a year earlier, though this decline has also eased from a 35% decline in November.
–
One possible factor for the increase in pending sales is the stabilization of mortgage rates, which have decreased to about 6% from a peak of over 7%. This decrease in rates has reduced the typical buyer’s monthly payment by nearly $200 and has helped some buyers return to the market.
–
However, despite the increase in pending sales and the stabilization of mortgage rates, the need for new listings means that prospective buyers currently have limited options. For example, some real estate agents in certain areas have reported increased homebuyer activity since the fall, with small bidding wars on reasonably priced homes in desirable neighborhoods. Data from early January suggests that some homeowners may be warming up to listing their homes for sale in light of the uptick in buyer interest.
–
