The housing market’s long stretch of favoring buyers may be ending.
U.S. pending home sales rose 9.6 percent year over year during the four weeks ending May 10, reaching their highest level since September 2022, according to a new Redfin report.
Several factors may be drawing buyers back. Redfin cited an improving job market and three straight weeks of declining mortgage rates in April as contributors to rising confidence, though the daily average climbed back to 6.57 percent May 13. Spring seasonality may also be playing a role, the report noted, though Redfin said that seasonal boost appears to be arriving late this year.
Supply is not keeping pace. New listings fell 1.6 percent year over year, the third consecutive week of declines, Redfin data shows. Mortgage-purchase applications rose 4 percent week over week, per the Mortgage Bankers Association.
The median sale price rose 2.2 percent year over year to $397,740, the second-largest increase in seven months. The daily average 30-year fixed mortgage rate stood at 6.57 percent May 13, near its highest level since August, according to Mortgage News Daily. The weekly average was 6.37 percent for the week ending May 7, per Freddie Mac.
Chen Zhao
“House hunters should take note: As more buyers enter the market, they may lose some negotiating power,” said Chen Zhao, Redfin’s head of economics research. “More buyers in the market equals more competition, which could create bidding wars, push prices up and make it harder to secure that perfect home.”
With 3.5 months of supply, the market remains below the four-to-five-month range considered balanced. Redfin noted the gap between buyer and seller activity has narrowed and may continue to tighten if demand accelerates.
