New US Home Listings See Biggest Rise in More Than 3 Months

New listings of homes for sale jumped by 2.3 percent year-over-year for the four weeks that ended on Oct. 5, real estate brokerage Redfin said in an Oct. 9 statement.

The 2.3 percent gain is the largest such annual increase in more than three months.

“Some sellers listed their homes in September as the weekly average mortgage rate dipped to 6.26 percent, a 10-month low, in hopes that lower rates would lure buyers,” the brokerage stated.

“But buyers aren’t budging. Pending sales fell 1.3 percent from a year ago, the biggest decline in five months, and the typical home that sells is taking 48 days to go under contract, a week longer than last year and the longest September span since 2019.”

Redfin agents say prospective home buyers are waiting for mortgage rates to drop further before committing to put money down for a property.

The average weekly rate on a 30-year fixed-rate mortgage was 6.3 percent for the week that ended on Oct. 9, down from the 7.04 percent rate in mid-January, according to data from Freddie Mac.

While the 0.74 percent drop is significant, mortgage rates remain far higher compared to historical levels. For instance, the average weekly rate was 2.87 percent for the week that ended on Oct. 7, 2020.

Complicating affordability is the fact that the median home sales price rose by 2.1 percent yearly for the four weeks that ended on Oct. 5, which is the largest increase in six months, according to Redfin.

In addition to affordability issues, some buyers are wary of buying properties because of ongoing economic uncertainty, such as the government shutdown. While buyers hesitate, the market remains tilted in their favor, the brokerage stated.

For instance, there were more than half a million more home sellers than buyers in the housing market in August, which gives buyers negotiating power.

“It’s a buyer’s market, with house hunters asking for price reductions, doing inspections, and requesting concessions,” said Jesse Landin, a Redfin Premier agent in San Antonio.

“In terms of making offers, buyers are throwing spaghetti at the wall to see what sticks. Sellers who want to make it stick, will.”

In an Oct. 9 commentary, Lisa Sturtevant, chief economist at real estate data company Bright MLS, said that the recent dip in rates has resulted in some buyers entering the housing market.

However, the resulting sales bump could be short-lived if mortgage rates start moving up again, she wrote.

“Mortgage rates could go up if inflation comes in higher-than-expected this month. In addition, economic uncertainty, rising consumer debt, and persistent housing affordability challenges are headwinds to the housing market this fall,” Sturtevant said.

In an Oct. 1 analysis, real estate marketplace Zillow warned that the mortgage and housing system may get strained if the federal government shutdown is not resolved. For instance, the processing of federally insured or guaranteed loans will slow down during a shutdown.

“Every day of a shutdown adds backlog to underwriting, appraisal reviews, documentation, Federal Housing Administration operations, and oversight. Loans tied to federal programs will likely be the first to slow—and perhaps the last to catch up when things resume,” the Zillow analysis reads.

“By recent estimates, more than 2,500 mortgage originations per working day are at risk of delays during a shutdown, in programs directly tied to federal agencies. That means deals relying on these lending mechanisms may stall, perhaps indefinitely.”