{"id":75876,"date":"2023-02-24T05:00:15","date_gmt":"2023-02-24T13:00:15","guid":{"rendered":"https:\/\/www.redfin.com\/news\/?p=75876"},"modified":"2023-03-06T12:18:19","modified_gmt":"2023-03-06T20:18:19","slug":"housing-market-tracker-january-2023","status":"publish","type":"post","link":"https:\/\/www.redfin.com\/news\/housing-market-tracker-january-2023\/","title":{"rendered":"Market Recovery Hampered by High Housing Costs, Low Supply in January"},"content":{"rendered":"

Pending home sales improved slightly, but an ongoing affordability crisis and lack of homes for sale kept many house hunters on the sidelines.<\/span><\/i><\/h2>\n

Pending home sales rose 0.5% from a month earlier in January on a seasonally-adjusted basis. That compares with December’s revised month-over-month increase of 1.4%, which was the first gain in 14 months.<\/span><\/p>\n

Pending sales fell from a year earlier, but the decline eased for the second month in a row\u2014to 29.4% in January from 32.5% in December and a record 35.5% drop in November. Redfin\u2019s records date back to 2012.<\/span><\/p>\n

\u201cA dip in mortgage rates brought some buyers off the bench in January, but the housing-market recovery was tempered by still-high housing costs and a limited number of homes being listed for sale,\u201d said Redfin Deputy Chief Economist <\/span>Taylor Marr<\/span><\/a>. \u201cThere were fewer new listings in January than at any point on record, with the exception of the start of the pandemic. That hampered demand because it meant that many of the buyers who were still in the market had a tough time finding a home that met their needs. The shortage of homes for sale also buoyed home prices.\u201d<\/span><\/p>\n

Marr continued: \u201cThe housing market <\/span>took two steps forward<\/span><\/a> in December and January, but has taken one step back in February. Mortgage rates crept back up this month, which is <\/span>prompting<\/span><\/a> more buyers and sellers to back off.\u201d<\/span><\/p>\n

Home-purchase applications dropped to the lowest level since 1995 last week as mortgage rates jumped on expectations that the Federal Reserve will need to raise interest rates again to combat inflation. The average 30-year-fixed mortgage rate is now <\/span>6.5%<\/span><\/a>, up from an average of 6.27% in January and 3.89% a year ago. That has caused the typical homebuyer\u2019s monthly payment to rise more than <\/span>$500<\/span><\/a> year over year.<\/span><\/p>\n

Closed home sales fell 1.4% from a month earlier in January and slumped a record 36.6% from a year earlier. In our December market report, we <\/span>noted<\/span><\/a> that the year-over-year decline in closed sales had eased slightly, but that didn\u2019t continue into the new year. The large drop in closed sales is partly due to the fact that many of the home purchases that closed in January went under contract in the fall, when mortgage rates hit a 20-year high.\u00a0<\/span><\/p>\n

New Listings Hit Second-Lowest Level on Record as Sellers Held on to Low Rates<\/span><\/h3>\n

New listings fell 1.6% from a month earlier in January and dropped 19.9% from a year earlier. While that\u2019s an improvement from the 25.3% year-over-year decline in December\u2014the largest drop on record aside from the pandemic start\u2014listings remained scarce. There were fewer new listings in January than any other month on record aside from April 2020, when the onset of the pandemic brought the housing market to a halt.<\/span><\/p>\n

Many homeowners are reluctant to sell because they don\u2019t want to give up their relatively low mortgage rates. <\/span>About 85% of mortgage holders have a rate <\/span>far below<\/span><\/a> today\u2019s level of roughly 6%. Homeowners are also hesitant to put their homes on the market due to<\/span> soft homebuyer demand that\u2019s forcing sellers to cut prices. The median sale price of U.S. homes was $383,249 in January, down 1.4% from December and 11.5% below the May all-time high. Still, prices were up 1.5% from a year earlier, in part because low supply kept prices afloat.<\/span><\/p>\n

Almost one in every five home listings (17.7%) had a price drop last month. While that\u2019s down from the record high of 22.2% in October, it\u2019s up from 7% in January 2022\u2014the largest year-over-year increase on record. Just 21.2% of homes sold above their final list price, the lowest level in two years.\u00a0<\/span><\/p>\n

\u201cNice homes that are priced fairly are selling, but homes that are overpriced or poorly maintained are lingering on the market,\u201d said <\/span>Shay Stein<\/span><\/a>, a Redfin real estate agent in the Las Vegas area. \u201cA lot of sellers who don\u2019t get the price they had hoped for are taking their homes off the market. Many of them have a rock-bottom mortgage rate and figure they can wait to sell.\u201d<\/span><\/p>\n

T<\/span>he typical home that sold was on the market for 51 days\u2014the highest level since February 2020. That\u2019s up from 27 days in January 2022. Homes are taking longer to sell in part because homebuyer competition has dwindled. Roughly two of every five home offers (42.1%) written by Redfin agents faced a bidding war in January, the lowest level since April 2020. That\u2019s down from 43.1% a month earlier and 68% a year earlier. Pandemic boomtowns including Austin and Tampa saw among the largest declines in competition, as many homebuyers have been priced out.<\/span><\/p>\n

With many homes now lingering on the market, overall housing supply has ticked up. While active listings fell 1.2% from a month earlier in January, they were up 14.5% from a year earlier\u2014just shy of the 15% record year-over-year gain in December. Active listings hit a record low in January 2022, which is one reason the year-over-year increase is so dramatic.<\/span><\/p>\n

January Highlights<\/span><\/h3>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\nJanuary 2023<\/b><\/td>\nMonth-Over-Month Change<\/b><\/td>\nYear-Over-Year Change<\/b><\/td>\n<\/tr>\n
Median sale price<\/span><\/td>\n$383,249<\/span><\/td>\n-1.4%<\/span><\/td>\n1.5%<\/span><\/td>\n<\/tr>\n
Pending home sales, seasonally adjusted<\/span><\/td>\n397,838<\/span><\/td>\n0.5%<\/span><\/td>\n-29.4%<\/span><\/td>\n<\/tr>\n
Homes sold, seasonally adjusted<\/span><\/td>\n405,602<\/span><\/td>\n-1.4%<\/span><\/td>\n-36.6%<\/span><\/td>\n<\/tr>\n
New listings, seasonally adjusted<\/span><\/td>\n475,381<\/span><\/td>\n-1.6%<\/span><\/td>\n-19.9%<\/span><\/td>\n<\/tr>\n
All homes for sale, seasonally adjusted<\/span><\/td>\n1,606,974<\/span><\/td>\n-1.2%<\/span><\/td>\n14.5%<\/span><\/td>\n<\/tr>\n
Months of supply<\/span><\/td>\n3.2<\/span><\/td>\n0.7<\/span><\/td>\n1.7<\/span><\/td>\n<\/tr>\n
Median days on market<\/span><\/td>\n51<\/span><\/td>\n7<\/span><\/td>\n24<\/span><\/td>\n<\/tr>\n
Share of for-sale homes with a price drop<\/span><\/td>\n17.7%<\/span><\/td>\n3.3 ppts<\/span><\/td>\n10.7 ppts<\/span><\/td>\n<\/tr>\n
Share of homes sold above final list price<\/span><\/td>\n21.2%<\/span><\/td>\n-1.9 ppts<\/span><\/td>\n-21.3 ppts<\/span><\/td>\n<\/tr>\n
Average sale-to-final-list-price ratio<\/span><\/td>\n97.8%<\/span><\/td>\n-0.2 ppts<\/span><\/td>\n-2.6 ppts<\/span><\/td>\n<\/tr>\n
Share of home offers written by Redfin agents that faced competition, seasonally adjusted<\/span><\/td>\n42.1%<\/span><\/td>\n-1 ppt<\/span><\/td>\n-25.9 ppts<\/span><\/td>\n<\/tr>\n
Pending sales that fell out of contract, as % of overall pending sales<\/span><\/td>\n14.1%<\/span><\/td>\n-2.1 ppts<\/span><\/td>\n2 ppts<\/span><\/td>\n<\/tr>\n
Average 30-year fixed mortgage rate<\/span><\/td>\n6.27%<\/span><\/td>\n-0.09 ppts<\/span><\/td>\n2.8 ppts<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Note: Data is subject to revision<\/span><\/i><\/p>\n

Metro-Level Highlights: January 2023<\/span><\/h3>\n

Data in the bullets below came from a list of the 90 U.S. metro areas with populations of at least 750,000, unless otherwise noted. We have excluded Boise, ID and San Antonio, TX while we investigate a potential data issue. <\/span><\/i>To find the full metro-level and national datasets, head to the monthly section of the Redfin <\/span><\/i>Data Center<\/span><\/i><\/a>. <\/span><\/i>Refer to our <\/span><\/i>metrics definition page<\/span><\/i><\/a> for explanations of metrics used in this report. Metro-level data is not seasonally adjusted.<\/span><\/i><\/p>\n