Pending home sales indicator hits new 2023 highs, but many may decline

Home sellers’ acceptance of offers reached an all-time high last month on a seasonally adjusted basis, but many deals may not close, redfin tuna reported on Friday.

According to Redfin’s analysis of multiple listing service data, the seasonally adjusted annual pending sales volume was nearly 401,000 units, an increase of 1% from the previous month and an 11-month high. The last time the number reached this high was a year ago, when it was nearly 421,000.

(Redfin releases pending home sales data before releasing a separate report on a similar metric National Association of Realtors. The report is due later this month. )

Realtors and mortgage originators said that while Redfin’s data is an upbeat number for the housing market, it contrasts with a decline in completed sales. Volume fell 1.8% this month and was down 12.5% ​​from the previous month. a year ago.

“I’m seeing a lot of people getting cold feet,” Eric Auciello, Redfin’s Tampa sales manager, said in the company’s report, noting that high home prices, insurance costs and rates contributed to some of the price shock.

“When buyers saw the final numbers, a lot of them backed out,” he said, noting that sellers’ refusal to make repairs buyers wanted also played a factor in the fallout.

The question now is whether Financing costs have fallen recently Follow-up sales could be encouraged during traditionally soft times of the year and build on some of the stronger indicators that have emerged in the housing market recently.

“Buyer activity is generally higher and price trends are stronger compared to last year,” said Barry Habib, founder and CEO of MBS Highway, an online provider of mortgage-backed securities and housing data.

“The decline in Treasury yields and mortgage rates that we’ve seen over the past few weeks also does have the potential to limit trading volumes,” he added in comments included in the firm’s latest report.

The MBS Highway national housing index was 31 in November, compared with 35 the previous month and 13 a year ago. The index ranges from 1 to 100, with values ​​above 50 reflecting expansion and below 50 reflecting contraction.

One regional market with relatively healthy buyer activity saw a significant decline, while other markets were either stable or only slightly volatile.

The Northeast region’s index fell to 30 in November from 45 last month, after the region was one of the most active markets with generally positive price trends for much of the year.

Overall, there is more downward pressure on prices, but the recent fall in interest rates may change this trend, according to the MBS Highways report. The sub-index, which indicates price direction, fell to 41 this month from 46, but was up from 12 a year ago.

In addition to rates, inventory availability will also play a role in where prices go next.The latest round of construction indicators released by the Commerce Department shows these numbers surprisingly powerful in October.

That’s in stark contrast to Thursday’s construction confidence index, released by the National Association of Home Builders and Wells Fargo, which fell to its lowest point in a year.

Smaller builders are unable to offer the same buyer incentives that larger builders offer, which may account for the lower index reading, according to reports from First American and John Burns Research & Advisors.

“Builder confidence could pick up in December if mortgage rates remain below their peak or move lower,” First American deputy chief economist Odeta Kushi said in a note.

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