Recent reports from real estate brokerage Redfin indicate that almost half of all homes on the U.S. market remain unsold for at least 60 days, even after the lowering of Federal Reserve rates. In August, 48% of listings were still on the market, a significant increase from last year’s figure of 43.2%. This trend has persisted for the past five months, according to Redfin’s September 25 report.
Typically, home sales increase when mortgage rates fall. However, this year, the opposite effect is observed, with sales dropping and homes remaining unsold for longer periods. Sheharyar Bokhari, senior economist at Redfin, remarked, “Last week’s big interest rate cut by the Federal Reserve will give buyers a boost in confidence, but it remains to be seen whether sales will speed up in any meaningful way as we move into the slower Fall season.”
Redfin also highlighted that nearly 68.5% of homes took at least a month to sell, with the median waiting time being 37 days. However, these numbers vary depending on the location.
The fastest-selling homes were found in Seattle, where properties were typically under contract within 12 days. Followed by Indianapolis (16 days), Warren, Michigan (17 days), San Jose, California (18 days), and Oakland, California (20 days). Compared to the previous year, these top five metros experienced an increase of two to six days in their average selling time.
In contrast, Florida metros had the slowest sales. West Palm Beach took a median of 79 days to sell a home, followed by Fort Lauderdale (75 days), Jacksonville (65 days), Miami (65 days), and Austin, Texas (65 days).
The report also revealed that there was an estimated inventory of 467,000 new houses for sale in August, resulting in a supply of 7.8 months at the current sales rate.
Lower mortgage rates have sparked an increase in refinance activity, allowing homeowners to potentially reduce their monthly mortgage payments. However, prospective homebuyers are adopt a wait-and-see approach, hoping for further rate decreases as more economic data is released in the coming weeks.
The combination of lower mortgage rates and increased inventory should encourage homebuyers, but uncertainty surrounding the political climate and general indecision are making buyers hesitant. The housing market and mortgage rates have emerged as key issues in the 2024 presidential election.
Additionally, data from the Mortgage Bankers Association suggests that the national median mortgage application payment decreased to $2,057 last month from $2,140 in July, contributing to improved homebuyer affordability. Edward Seiler, associate vice president of the MBA, stated, “Lower mortgage rates, rising incomes, and slower home-price growth have given prospective buyers welcomed budget relief.”
Discover more from Tension News
Subscribe to get the latest posts sent to your email.