Redfin Reports Homebuying Demand Holds Up Even As Election Uncertainty, Stronger-Than-Expected Economy Push Up Rates

Rhea-AI Summary

Redfin reports strong homebuying demand despite rising mortgage rates and election uncertainty. Pending U.S. home sales increased 3.5% year over year during the four weeks ending October 20, marking the biggest increase in three years. The Redfin Homebuyer Demand Index reached its highest level since May, up 3% year over year. Mortgage rates have risen to 6.44%, up from 6.08% in late September, with daily averages hitting 6.92%. The median U.S. monthly housing payment reached $2,587, near its highest level since July. While mortgage-purchase applications fell 5%, new listings rose 2.2% annually, and pending sales increased in 35 of the 50 most populous U.S. metros.

Positive

• Pending home sales up 3.5% YoY, highest in three years
• Homebuyer Demand Index at highest level since May, up 3% YoY
• Pending sales increased in 35 of 50 largest metros
• Median sale price up 4.7% to $385,250

Negative

• Mortgage rates increased to 6.44% from 6.08% in September
• Monthly housing payment reached $2,587, near highest since July
• Mortgage-purchase applications fell 5% week-over-week
• Average sale-to-list price ratio decreased 0.3 points to 98.8%

Insights

Market Research Analyst

The housing market is showing unexpected resilience despite challenging conditions. Pending home sales rose 3.5% year-over-year, with 35 of 50 major metros showing increases - the highest number in three years. This strength persists even as the median monthly housing payment reaches $2,587.

Two key factors are supporting this resilience: First, cash buyers are likely sustaining market activity despite a 5% drop in mortgage applications. Second, inventory (new listings up just 2.2%) is maintaining price stability. The 15.2% increase in active listings represents the smallest gain since March, indicating a relatively balanced market.

Notable regional variations exist, with San Francisco leading in pending sales growth (21.2%) while Florida markets show significant declines. This divergence suggests a shift in regional market dynamics that could present opportunities for investors focused on specific metropolitan areas.

Financial Analyst

The market's response to rising rates and election uncertainty reveals important dynamics for investors. The increase in mortgage rates to 6.44% (weekly average) and 6.92% (daily) reflects growing concerns about potential post-election fiscal policy and its impact on government debt levels.

The persistence of buyer demand despite these headwinds suggests underlying strength in housing market fundamentals. However, the average sale-to-list price ratio of 98.8% and declining share of homes sold above list price (down to 26%) indicate buyers are gaining some negotiating power. This shift, combined with increased days on market (+7), points to a gradual market rebalancing that could affect real estate company valuations and investment strategies.

Pending sales and home tours remain fairly strong as mortgage rates rise to their highest levels since mid-summer and uncertainty around the election picks up

SEATTLE--(BUSINESS WIRE)-- (NASDAQ: RDFN) — Pending U.S. home sales rose 3.5% year over year during the four weeks ending October 20, the biggest increase in three years (with the exception of the prior 4-week period, when they rose 3.7%). That’s according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. On a local level, pending sales are up in 35 of the 50 most populous U.S. metros, the most in three years.

Demand is also holding up at earlier stages of the homebuying process. Redfin’s Homebuyer Demand Index–a measure of tours and other buying services from Redfin agents–hit its highest level since May and is up 3% year over year.

Redfin economists say pending sales and home tours are performing surprisingly well in the face of high housing costs and uncertainty surrounding the upcoming election. Chen Zhao, Redfin’s economic research lead, said she would expect a bigger dropoff in homebuying demand given how much mortgage rates have increased in the last few weeks. The weekly average mortgage rate is 6.44%, up from a two-year low of 6.08% at the end of September, and the daily average is 6.92%, its highest level since July.

Election uncertainty, stronger-than-expected economy are pushing mortgage rates up

Mortgage rates are jumping because investors’ expectations of the impending election are shifting, and because the most recent jobs and inflation reports showed the economy is a bit stronger than expected.

“Investors in the bond market are particularly worried about the possibility of increased government debt after the election,” Zhao said. “They’re concerned that one party could end up controlling both the White House and Congress, which would increase government spending more. That concern, along with strong economic data, is pushing up 10-year treasury yields and mortgage rates.”

High mortgage rates have pushed monthly housing payments near their highest level since July

Rising rates and stubbornly high home prices have pushed the median U.S. monthly housing payment to $2,587, the highest level since July (except the prior 4-week period, when the median payment was $2,591). Cash buyers may be propping up home sales: Mortgage-purchase applications fell 5% in the last week, dropping near their lowest level in a year, even as pending sales and early-stage demand hold up.

On the selling side, new listings of homes for sale are up 2.2% annually, one of the smallest increases in a year.

“There are buyers out there, especially for homes in desirable locations with highly rated schools and counties with lower taxes,” said Shari Mosteller, a Redfin Premier agent in Atlanta. “But more buyers are negotiating on price, asking for concessions and money toward closing costs. On my listings, I’m seeing a trend of buyers asking for minor repairs and/or cosmetic items. Many are getting creative with different types of mortgages, opting for an adjustable rate or a shorter loan period. That said, a fair amount of folks, both buyers and sellers, are waiting on the sidelines until after the election because they feel a lot of uncertainty in the housing market.”

For Redfin economists’ takes on the housing market, please visit Redfin’s “From Our Economists” page.

Indicators of homebuying demand and activity
	Value (if applicable)	Recent change	Year-over-year change	Source
Daily average 30-year fixed mortgage rate	6.92% (Oct. 23)	Highest level since July	Down from 7.91%	Mortgage News Daily
Weekly average 30-year fixed mortgage rate	6.44% (week ending Oct. 17)	Up from 2-year low of 6.08% 3 weeks earlier	Down from 7.63%	Freddie Mac
Mortgage-purchase applications (seasonally adjusted)		Down 5% from a week earlier (as of week ending Oct. 18)	Up 3%	Mortgage Bankers Association
Redfin Homebuyer Demand Index (seasonally adjusted)		Up 7% from a month earlier (as of week ending Oct. 20)	Up 3%   Highest level since May	Redfin Homebuyer Demand Index, a measure of tours and other homebuying services from Redfin agents
Touring activity		Down 1% from the start of the year (as of Oct. 21)	At this time last year, it was down 13% from the start of 2023	ShowingTime, a home touring technology company
Google searches for “home for sale”		Up 4% from a month earlier (as of Oct. 21)	Down 8%	Google Trends

Key housing-market data

U.S. highlights: Four weeks ending Oct. 20, 2024
Redfin’s national metrics include data from 400+ U.S. metro areas, and is based on homes listed and/or sold during the period. Weekly housing-market data goes back through 2015. Subject to revision.
	Four weeks ending Oct. 20, 2024	Year-over-year change	Notes
Median sale price	$385,250	4.7%	Biggest increase since March
Median asking price	$399,098	6.1%	Biggest increase in 2 years
Median monthly mortgage payment	$2,587 at a 6.44% mortgage rate	-4.6%	Up from $2,487 a month earlier; near highest level since July
Pending sales	75,156	3.5%	Biggest increase in nearly 3 years (except the prior 4-week period, when they increased 3.7%)
New listings	84,285	2.2%	Smallest increase in a year (except the 4-week period ending August 25, when there was a 1.8% increase)
Active listings	1,029,151	15.2%	Smallest increase since March
Months of supply	4.1	+0.6 pts.	4 to 5 months of supply is considered balanced, with a lower number indicating seller’s market conditions
Share of homes off market in two weeks	33.3%	Down from 38%
Median days on market	40	+7 days
Share of homes sold above list price	26%	Down from 30%
Average sale-to-list price ratio	98.8%	-0.3 pts.

Metro-level highlights: Four weeks ending Oct. 20, 2024
Redfin’s metro-level data includes the 50 most populous U.S. metros. Select metros may be excluded from time to time to ensure data accuracy.
	Metros with biggest year-over-year increases	Metros with biggest year-over-year decreases	Notes
Median sale price	Milwaukee (12.8%)	Austin, TX (-3.9%)	Declined in 3 metros
	Fort Lauderdale, FL (11.7%)	San Antonio (-3.1%)
	Nassau County, NY (10.1%)	San Francisco (-0.9%)
	Providence, RI (9.4%)
	Chicago (9.3%)
Pending sales	San Francisco (21.2%)	Tampa, FL (-33.7%)	Increased in 35 metros
	Portland, OR (19.7%)	West Palm Beach, FL (-19.8%)
	Seattle (17.9%)	Fort Lauderdale, FL (-16.7%)	The last time pending sales increased in this many metro areas was in May 2021
	San Jose, CA (16.5%)	Miami (-14.5%)
	Anaheim, CA (16.2%)	Orlando, FL (-13.6%)
New listings	San Jose, CA (17.8%)	Tampa, FL (-40%)	Declined in 9 metros
	Seattle (16.7%)	Atlanta (-17.2%)
	Phoenix (16.7%)	West Palm Beach, FL (-14.4%)
	Baltimore, MD (16.3%)	Orlando, FL (-12.5%)
	Anaheim, CA (15.1%)	Fort Lauderdale, FL (-9.2%)

To view the full report, including charts, please visit: https://www.redfin.com/news/housing-market-update-demand-holding-up-mortgage-rates-rise

About Redfin

Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, title insurance, and renovations services. We run the country's #1 real estate brokerage site. Our customers can save thousands in fees while working with a top agent. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home can have our renovations crew fix it up to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we've saved customers more than $1.6 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 4,000 people.

Redfin’s subsidiaries and affiliated brands include: Bay Equity Home Loans®, Rent.™, Apartment Guide®, Title Forward® and WalkScore®.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email press@redfin.com. To view Redfin's press center, click here.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241024320156/en/

Contact Redfin

Redfin Journalist Services:

Tana Kelley

press@redfin.com

Source: Redfin

FAQ

What was Redfin's (RDFN) pending home sales growth in October 2024?

Redfin reported a 3.5% year-over-year increase in pending home sales during the four weeks ending October 20, 2024, marking the biggest increase in three years.

What is the current mortgage rate according to Redfin's (RDFN) report?

The weekly average mortgage rate is 6.44%, with daily averages reaching 6.92%, the highest level since July.

How much is the median monthly housing payment according to Redfin (RDFN)?

The median U.S. monthly housing payment reached $2,587, near its highest level since July 2024.

How many major metros showed increased pending sales in Redfin's (RDFN) report?

Pending sales increased in 35 of the 50 most populous U.S. metros, the most in three years.