In a positive turn for the housing market, falling mortgage rates have injected new vitality, leading to a surge in listings, pending sales, and substantial price growth. The latest data indicates a noteworthy upswing, marking the highest activity levels in approximately a year.
November witnessed a 1.3% month-over-month increase in new listings, reaching the highest point since October 2022, accompanied by a modest 0.1% rise from the previous year. Concurrently, pending home sales experienced a 2% month-over-month boost, achieving the highest level in a year.
The substantial 3.9% month-over-month growth in active listings signals a shift in supply dynamics, though it reflects a 7.9% decline from a year earlier. Despite not reverting to pre-pandemic levels, this increase suggests a changing landscape for prospective buyers.
Mortgage rates, though not back to their pre-recent highs, have seen a recent decline, enticing buyers with the prospect of lower monthly payments. The average 30-year-fixed mortgage rate closed November at 7.22% and currently stands at 6.95%, down from the October peak of 7.79%. Nevertheless, it remains higher than the 6.3% rate recorded a year ago.
However, not all aspects are uniformly positive. A noteworthy concern arises from the record rate of canceled home-purchase agreements, reaching 16.9% in November. Economic uncertainty, despite lower mortgage rates, continues to deter some buyers, contributing to a cautious approach and a degree of deal abandonment.
The housing market seems to be finding equilibrium, with annual price growth showing signs of normalization after the extremes witnessed during the pandemic. As the market navigates economic uncertainties, buyers and sellers are gradually aligning their expectations, fostering a more resilient and adaptable real estate landscape.