{"id":164815,"date":"2024-01-17T11:49:53","date_gmt":"2024-01-17T18:49:53","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=164815"},"modified":"2024-07-27T13:39:04","modified_gmt":"2024-07-27T19:39:04","slug":"pending-home-sales-increase-as-mortgage-rates-continue-to-fall","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/pending-home-sales-increase-as-mortgage-rates-continue-to-fall","title":{"rendered":"The Impact of Lower Mortgage Rates Is Already Being Felt in These Five Markets"},"content":{"rendered":"\n\n      <iframe loading=\"lazy\" frameborder=\"0\" height=\"200\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm\/?e=BIGPOC5025983063\" width=\"100%\"><\/iframe>\r\n  \n\n\n\n\n<p><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/what-is-a-mortgage\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Mortgage<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;payments are decreasing, which has some house hunters returning to the real estate market. According to the latest data from&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.redfin.com\/news\/housing-market-update-monthly-payments-drop\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Redfin<\/span><\/a><span data-preserver-spaces=\"true\">, for the four weeks ended Dec. 31, 2023, the median mortgage payment was down 14% compared to October\u2019s all-time high. Meanwhile, the weekly average&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.freddiemac.com\/pmms\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">rate<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;in early January 2024 was at 6.66% for a 30-year fixed-rate mortgage, compared to 7.79% in October.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">This means homebuyers are finally getting a break from skyrocketing interest rates. And as rates start to dip, some house hunters are taking advantage of an uptick in listings. Redfin\u2019s Homebuyer Demand Index, which measures requests for tours and homebuying services, was up 10% at the end of December from the previous month to its highest level since August, although it was down 6% year over year.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">\u201cIt\u2019s all about perspective,\u201d said Las Vegas-based Redfin agent Shay Stein in a press release. \u201cTwo years ago, buyers would have cried about a 6% mortgage rate. Now, they\u2019re happy they\u2019ve dropped down to the mid-6\u2019s.\u201d<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">What The Data Says<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">The dip in mortgage rates is having an impact on the housing market. Pending sales were down 3.3% year over year, the smallest decline since January 2022. Meanwhile, new listings were up 9.5% year over year, with active listings falling 3.9% in the same period.<\/span><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"903\" height=\"670\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2024\/01\/demand-index-13.png\" alt=\"redfin homebuyer demand index\" class=\"wp-image-164819\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2024\/01\/demand-index-13.png 903w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2024\/01\/demand-index-13-300x223.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2024\/01\/demand-index-13-768x570.png 768w\" sizes=\"auto, (max-width: 903px) 100vw, 903px\" \/><figcaption class=\"wp-element-caption\"><em>Homebuyer Demand Index (2020-2023) &#8211; <a href=\"http:\/\/redfin.com\" target=\"_blank\" rel=\"noopener\">Redfin<\/a><\/em><\/figcaption><\/figure>\n\n\n\n<p><span data-preserver-spaces=\"true\">Of course, the data isn\u2019t the same across the country. In some metro areas, sales fell while pending sales increased. Regions of Florida had some of the most significant sales price increases over the year, which is&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/q3-2023-migration-report\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">in line<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;with<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/8-million-people-moved-in-2022-according-to-census\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">&nbsp;other data<\/span><\/a><span data-preserver-spaces=\"true\">, as the Sunshine State remains a popular homeowner destination.<\/span><\/p>\n\n\n\n<figure class=\"wp-block-table is-style-regular\"><table class=\"has-fixed-layout\"><thead><tr><th><strong>Metros With Biggest Year-Over-Year Increase in Pending Sales<\/strong><\/th><th><strong>Metros With Biggest Year-Over-Year Decrease in Pending Sales<\/strong><\/th><\/tr><\/thead><tbody><tr><td><span style=\"font-weight: 400;\">Dallas (11.3%)<\/span><\/td><td><span style=\"font-weight: 400;\">Providence, Rhode Island (-15.4%)<\/span><\/td><\/tr><tr><td><span style=\"font-weight: 400;\">Milwaukee (9.3%)<\/span><\/td><td><span style=\"font-weight: 400;\">New Brunswick, New Jersey (-13.6%)<\/span><\/td><\/tr><tr><td><span style=\"font-weight: 400;\">Cleveland (6.3%)<\/span><\/td><td><span style=\"font-weight: 400;\">Newark, New Jersey (-12.5%)<\/span><\/td><\/tr><tr><td><span style=\"font-weight: 400;\">San Jose, California (5.6%)<\/span><\/td><td><span style=\"font-weight: 400;\">New York City (-10.8%)<\/span><\/td><\/tr><tr><td><span style=\"font-weight: 400;\">Chicago (5.6%)<\/span><\/td><td><span style=\"font-weight: 400;\">Atlanta (-10%)<\/span><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><span data-preserver-spaces=\"true\">Meanwhile, home prices in some areas like Austin, Texas, and San Francisco are on the decline as more people are starting to leave some once-popular metro areas.<\/span><\/p>\n\n\n\n<figure class=\"wp-block-table is-style-regular\"><table class=\"has-fixed-layout\"><thead><tr><th><strong>Metros With Biggest Year-Over-Year Increase in Median Sale Price<\/strong><\/th><th><strong>Metros With Biggest Year-Over-Year Decrease in Median Sale Price<\/strong><\/th><\/tr><\/thead><tbody><tr><td>Newark, New Jersey (18.2%)<\/td><td>Fort Worth, Texas (-3.1%)<\/td><\/tr><tr><td>Anaheim, California (18.1%)<\/td><td>Austin, Texas (-1.7%)<\/td><\/tr><tr><td>West Palm Beach, Florida (15.2%)<\/td><td>San Francisco (-1.1%)<\/td><\/tr><tr><td>Fort Lauderdale, Florida (15.1%)<\/td><td>Denver (-0.4%)<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><span data-preserver-spaces=\"true\">New listings have also declined in 11 metro areas, including San Francisco (-35.3%), Atlanta (-11.5%), and Providence, Rhode Island (-9.8%). However, they\u2019ve jumped in some major cities, including Phoenix (23.5%), as well as Austin, San Antonio, and Dallas, Texas (all up 20.9%, 18.3%, and 16.4%, respectively).<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">What This Means for Investors<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">So, what does all this data mean for real estate investors? First, the decline in mortgage rates is encouraging, even if it\u2019s still relatively high overall. And&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.bankrate.com\/real-estate\/housing-trends\/#what-to-expect\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">some experts<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;think it could encourage more house hunters to start searching for homes again.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Shri Ganeshram, founder and CEO of real estate site Awning, told Bankrate he expects an increase in activity at the start of the year, which \u201ccould lead to a more dynamic market than usual for this period.\u201d<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Meanwhile, Rick Sharga, founder and CEO of CJ Patrick, also told Bankrate he anticipates a modest first quarter of weak sales and modest price increases. But dropping mortgage rates \u201cwill probably continue to decline through the first quarter\u2014bringing more prospective buyers back into the market.\u201d<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Still, it\u2019s possible that rates won\u2019t drop far enough for current owners to put their homes on the market, which means house hunters could continue facing a supply crunch.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">The Bottom Line<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Mortgage rates are still high, but the recent decline has been welcoming for homebuyers. And while sellers are generally still not tempted to put their homes on the market given the current rates, keeping supply low, there are opportunities for house hunters.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">This is especially true in metro areas with falling demand. In Texas, prices are falling, even as new listings increase. With signs that the Federal Reserve could cut rates this year, that means mortgages could get cheaper, which would likely increase demand for real estate.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">In other words, if you find a home you can afford, now might be the time to buy\u2014before the competition increases.<\/span><\/p>\n\n\n\n<div class=\"wp-block-group has-slate-200-background-color has-background\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n<h2 class=\"wp-block-heading has-text-align-center has-theme-slate-dark-color has-text-color\">More from BiggerPockets: 2024 State of Real Estate Investing Report<\/h2>\n\n\n\n<div class=\"wp-block-media-text has-media-on-the-right is-stacked-on-mobile is-vertically-aligned-top\" style=\"grid-template-columns:auto 43%\"><div class=\"wp-block-media-text__content\">\n<p class=\"has-theme-slate-dark-color has-text-color\">After more than a decade of clearly favorable investing conditions, market dynamics have shifted. Conditions for investment are now more nuanced, and more uncertain. Download the 2024 State of Real Estate Investing report written by Dave Meyer, to <strong>find out which strategies and tactics are best suited to win in 2024.<\/strong>&nbsp;<\/p>\n\n\n\n<div x-data=\"frictionlessSignupForm()\" class=\"button-account-type alignleft\">\n\n  \n\n  <!-- Guest Button -->\n      <template x-if=\"!$store.wp.isMember()\">              <button x-on:click=\"$store.wp.displaySignupPrompt()\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\">Sign up to download<\/button>\n          <\/template>  \n  <!-- Free Member Button -->\n      <template x-if=\"$store.wp.isMember() &#038;&#038; !$store.wp.isPaidMember()\">              <a href=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/11\/BP_State-of-REI_2024-final.pdf\" target=\"_blank\" x-on:click=\"window.analytics.track(&#039;Blog | Carrot Download | SOREI 2024&#039;, {\n            referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/pending-home-sales-increase-as-mortgage-rates-continue-to-fall&#039;,\n            account_type: &#039;free&#039;,\n          });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\">Download<\/a>\n          <\/template>  \n  <!-- Pro Member Button -->\n      <template x-if=\"$store.wp.isPaidMember()\">      <a href=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/12\/BP_State-of-REI_2024-final_Updated-Dec-5.pdf\" target=\"_blank\" x-on:click=\"window.analytics.track(&#039;Blog | Carrot Download | SOREI 2024&#039;, {\n          referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/pending-home-sales-increase-as-mortgage-rates-continue-to-fall&#039;,\n          account_type: &#039;pro&#039;,\n        });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\">Download<\/a>\n    <\/template>  \n  <!-- Frictionless Popup -->\n  <\/div>\n<\/div><figure class=\"wp-block-media-text__media\"><img loading=\"lazy\" decoding=\"async\" width=\"680\" height=\"600\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/11\/MiniAnnouncement.png\" alt=\"\" class=\"wp-image-162917 size-full\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/11\/MiniAnnouncement.png 680w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/11\/MiniAnnouncement-300x265.png 300w\" sizes=\"auto, (max-width: 680px) 100vw, 680px\" \/><\/figure><\/div>\n<\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Rates have been falling for the past few months, and signs of the market warming up are already here. These five markets have the highest gains in activity since last year.<\/p>\n","protected":false},"author":613681,"featured_media":151364,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7381,7119],"tags":[],"class_list":["post-164815","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-housing-prices","category-biggerpockets-daily"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/164815","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613681"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=164815"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/164815\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/151364"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=164815"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=164815"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=164815"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}