September Marks a Turning Point for Housing Demand: Pending Sales Stabilize, Home Tours Surge

 


September brought some welcome news for the real estate market: pending home sales held steady for the first time in nine months, signaling a potential turning point for demand. As mortgage rates continue to decline, other key indicators like home tours and mortgage-rate locks are also showing improvement.

Pending Sales Stabilize After Months of Declines

For the four weeks ending September 29, pending home sales were flat compared to a year ago. This is the first time since January that sales didn’t decline year-over-year, a positive sign for the market. Sales are picking up in many major metros, with cities like Phoenix seeing a 13% increase, followed by San Jose and Portland with 12% and 10% gains, respectively. Although pending sales haven’t returned to pre-pandemic levels, this improvement hints at a growing interest in homebuying.

However, not all regions are experiencing this uptick. Florida, in particular, continues to see a decline in pending sales due to factors like climate-related challenges, rising insurance costs, and increasing HOA fees. Cities like West Palm Beach, Fort Lauderdale, and Miami posted the largest year-over-year declines in pending sales.

Demand is Rising Across the Board

The uptick in pending sales isn’t the only sign of growing demand. Redfin’s Homebuyer Demand Index, which measures home tours and other buying services, rose 9% month-over-month in September, reaching its highest level since April. Mortgage-purchase applications also surged 10%, showing that more buyers are locking in loans as rates drop.

The good news for buyers is that mortgage costs are coming down. The average 30-year mortgage rate fell to 6.08% last week, the lowest in two years, pushing the typical monthly mortgage payment down to $2,529—a 5.9% decrease from last year. This significant drop in mortgage costs is helping ease the financial burden for prospective buyers, making it a good time to explore the market.

Listings on the Rise, But Not All Sellers Are Ready

Declining mortgage rates are encouraging some homeowners to sell, leading to a rise in new listings. In fact, listings have been steadily increasing for nearly a year, with a 4.3% rise in the past week alone. Still, not all sellers are rushing to list their homes. Many are holding onto ultra-low mortgage rates they secured a few years ago, making them hesitant to sell even as demand picks up.

As Max Shadle, a Redfin Premier agent in Phoenix, explains, “There’s definitely more traffic at my listings since the Fed’s interest-rate cut, but we’re not seeing the multiple-offer frenzy that we had before. Sellers know demand is improving, but some are still cautious about giving up their low mortgage rates.”

What’s Next for Homebuyers?

With mortgage rates down and demand starting to improve, now could be a great time to make your move in the housing market. Whether you’re looking to buy your first home or considering a refinance, falling rates are helping to make homeownership more affordable. Keep an eye on market trends and feel free to reach out if you have any questions about how these changes might impact your homebuying plans!

Original article: September Was a Turning Point For Demand, With Pending Home Sales Flat After 9 Months of Declines and Tours Hitting Highest Level Since April (redfin.com)

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