Home Sales Slumped 35% in November, the Biggest Decline on Record
SEATTLE--(BUSINESS WIRE)--(NASDAQ: RDFN) — Home sales fell 35.1% year over year in November on a seasonally-adjusted basis, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. That is the largest decline in Redfin’s records that date back to 2012.
Home-price growth also lost momentum. The median U.S. home-sale price rose just 2.6% from a year earlier, the smallest gain since May 2020, when the onset of the coronavirus pandemic brought the housing market to a near halt.
The housing market continued to cool in November as elevated housing costs kept buyers and sellers on the sidelines. New listings slumped 28.4% year over year, the biggest drop on record aside from April 2020. Despite the decrease in listings, overall supply rose 4.6% from a year earlier—a sign that homes lingered on the market as demand ebbed. Indeed, the typical for-sale home took 37 days to go under contract, up from 23 days a year earlier.
But there are early signs that demand may be starting to creep back as mortgage rates fall. There was a slight downtick in the portion of home-purchase agreements that were canceled in November, and mortgage applications and Redfin’s Homebuyer Demand Index have both been on the rise. Still, these early indicators haven’t translated into more home sales.
“The worst of inflation is likely in the rearview mirror,” said Redfin Economics Research Lead Chen Zhao. “We do anticipate that mortgage rates will decline slightly further in 2023 as the Fed’s actions continue to bring inflation down, which should ultimately bring more homebuyers back to the market. Still, we have a ways to go until we reach recovery mode, and we may see sales continue to ebb in the short term.”
Zhao continued: “Prospective buyers in places like San Francisco and Austin, where prices have already fallen from a year ago, should pay close attention to a potential turnaround; it could be the time to take action as demand and competitive offers could pick up in the coming months.”
Original article here.