{"id":75502,"date":"2022-12-01T12:21:57","date_gmt":"2022-12-01T20:21:57","guid":{"rendered":"https:\/\/www.redfin.com\/news\/?p=75502"},"modified":"2022-12-07T11:05:34","modified_gmt":"2022-12-07T19:05:34","slug":"housing-market-update-homebuying-demand-ticks-up-mortgage-rates-drop","status":"publish","type":"post","link":"https:\/\/www.redfin.com\/news\/housing-market-update-homebuying-demand-ticks-up-mortgage-rates-drop\/","title":{"rendered":"Housing Market Update: Homebuying Demand Jumps Slightly as Rates Continue to Decline"},"content":{"rendered":"

Mortgage applications and Redfin\u2019s demand index, a measure of tours and other homebuying services, are up as mortgage rates continue to come down. But pending home sales declined and the number of homes on the market increased as buyers took a break over Thanksgiving.<\/span><\/i><\/p>\n

Homebuying demand has started ticking up as mortgage rates continue their steady decline. <\/span>Daily rates dipped to <\/span>6.29%<\/span><\/a> on December 1, down one full percentage point from a peak of 7.29%, hit one month earlier. <\/span>Mortgage-purchase applications are up 4% from a week ago and Redfin\u2019s Homebuyer Demand Index is up about 1.5% from a month ago.\u00a0<\/span><\/p>\n

Price drops are becoming less common now that mortgage rates in the 6.5% range are thawing still-cool homebuyer demand. Just over 6% of homes for sale each week during the four weeks ending November 27 on average had a price drop, down sharply from 7.2% a week earlier and the lowest level since July.<\/span><\/p>\n

\u201cThere have been a handful of pieces of relatively good news for the housing market lately, but we\u2019re far from out of the woods. Key indicators of homebuying demand will likely be teetering on a knife\u2019s edge with every data release that comes out related to the Fed\u2019s path to eventually bringing rates down,\u201d said Redfin Deputy Chief Economist Taylor Marr<\/a>. \u201cWe\u2019re likely past peak inflation, past peak mortgage rates and past the bottom for mortgage purchase applications. But there\u2019s further cooling ahead for the housing market, as sales and prices have further to fall before buyers and sellers become comfortable with homebuying costs again.\u201d\u00a0<\/span><\/p>\n

Months of supply\u2013a measure of the balance between supply and demand, calculated by dividing the number of active listings by closed sales\u2013hit 4.1 months during the four weeks ending November 27, up sharply from the prior four-week period and the highest level since May 2020. <\/span>The supply of homes for sale posted its biggest year-over-year increase on record even as new listings declined by double digits, indicating homes lingered on the market over Thanksgiving week.<\/span><\/p>\n

Home prices are falling from a year earlier in 10 of the 50 most populous U.S. metros<\/span><\/h3>\n

Among the 50 most populous U.S. metros, home-sale prices fell from a year earlier in 10 of them. Prices fell 8.2% year over year in San Francisco, 2.8% in San Jose, CA, 2.7% in Pittsburgh, 2.3% in Detroit, 1.7% in Sacramento and 1.3% in Austin. They declined less than 1% in Chicago, San Diego,\u00a0 Los Angeles and Philadelphia.\u00a0<\/span><\/p>\n

This marks the first time Austin and Los Angeles home prices have fallen on a year-over-year basis since mid-2019. It\u2019s the first time Chicago prices have fallen since June 2020.\u00a0<\/span><\/p>\n

Leading indicators of homebuying activity:<\/span><\/h3>\n