Pending Home Sales Retreat Even as Mortgage Rates Dip to New Low
Pending Home Sales Retreat Even as Mortgage Rates Dip to New Low Sellers are slowly returning to the market as new listings are down 8.3% for the week ending June 28, up from a 9.2% decline the previous week |
[08-July-2020] |
SEATTLE, July 8, 2020 /PRNewswire/ -- (NASDAQ: RDFN) — The housing market closed out the month of June on somewhat uneven footing as pending sales pulled back slightly despite another record low for mortgage interest rates, according to a new report from Redfin (www.redfin.com), the technology-powered real estate brokerage. For the week ending June 28 pending home sales decreased 8.2% year-over-year, a sharp change from the revised 3.9% year-over-year increase a week earlier. However, after adjusting for seasonal effects, the decline was only 3%. This decline in pending sales may be a sign that pent-up homebuyer demand from March and April has mostly worked its way through the market, but it could also be due to a continued shortage of homes for sale. New Listings of Homes for Sale Still Lagging "Homebuyers are becoming frustrated because they're just not seeing a lot they want to buy," said Redfin Houston agent Irma Jalifi. "The lack of homes for sale has caused two of my buyers to just give up, when they had been trying to find a home before their leases were up at the end of July. It's disappointing to spend so much time and effort and come up empty-handed." Homes are More Expensive, but Still Selling Fast "Single-family homes priced between $300,000 and $600,000 are flying off the market right now," said Redfin Miami agent Maria Carcia-Gonzalez. "We have to educate our homebuyers about what is happening right now, because they tend to think that due to the coronavirus things aren't selling, or prices will drop and they can wait. In reality, for affordable single-family homes you have to be ready to make an offer close to list price and expect multiple offers with homes going off the market quickly." How Low Can Mortgage Rates Go? Outlook Hazy, July Will be Pivotal The renewed surge in COVID-19 cases in some parts of the country may be correlated with a local decline in pending sales, but it's too soon to say for sure. For example, as of June 28 the number of daily new cases of COVID-19 in the Phoenix area surged to over 2,000 from only 220 four weeks earlier, while the year-over-year change in pending home sales fell to -15%, down from a peak of +27% two weeks prior. Similar patterns can be seen in Las Vegas, Austin, and Houston. New listings have also pulled back in these markets, and are down 11% to 14% from a year earlier, compared to single-digit year-over-year declines a few weeks earlier. "A few of the homebuyers I'm working with have decided to stay home with the sudden rise in COVID-19 cases here locally," said Jalifi. "They're not going out to look at homes in person right now; they'd rather just look online." In contrast, Chicago has not seen a major rise in COVID-19 cases and has continued to see strong year-over-year growth in both pending sales (+33%) and new listings (+7%). Pending sales haven't declined in every market experiencing a surge in coronavirus cases—so it's too soon to say if health concerns are putting a damper on the market or if there may be another explanation. To view the full report, including charts and methodology, please visit: https://www.redfin.com/blog/housing-recovery-pulls-back-slightly/ About Redfin 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.
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Company Codes: NASDAQ-NMS:RDFN |
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