Pending Home Sales Drop 13% YOY as Mortgage Rates Stay Stubbornly High, Says Report

Mortgage rates are sitting near a two-decade high and U.S. home prices rose 3% year over year during the four weeks ending September 17, pushing monthly housing payments to an all-time high. That’s according to a new report from Redfin, the technology-powered real estate brokerage.

What homebuyers are doing: Waiting for homes to become more affordable and for more of them to hit the market. Soaring costs have pushed pending home sales down 13% from a year ago. The total number of homes for sale is down 16%, as many homeowners stay put to keep relatively low mortgage rates.

What home sellers are doing: A few more home sellers have jumped off the sidelines. New listings have stabilized, ticking up slightly since the beginning of September. They’re down 7% from a year earlier, but that’s the smallest decline since July 2022 (though it’s worth noting that new listings were falling rapidly at this time last year). It’s possible that some homeowners are taking advantage of rising home prices and low inventory, counting on being one of the only homes for sale in their neighborhood.

Where the Fed comes in: The Federal Reserve decided against an interest-rate hike at their meeting this week. But they also signaled that interest rates are likely to remain higher than anticipated into 2024 and 2025, which could keep borrowing costs—and mortgage rates—higher for longer. Buyers who are waiting for housing costs to come down may consider jumping into the market if they can afford to, because a meaningful decline probably isn’t coming soon.

Leading indicators

Indicators of homebuying demand and activity
	Value (if applicable)	Recent change	Year-over-year change	Source
Daily average 30-year fixed mortgage rate	7.47% (Sept. 21)	Near the two-decade high of 7.49%, hit a month earlier	Up from about 6.4%	Mortgage News Daily
Weekly average 30-year fixed mortgage rate	7.19% (week ending Sept. 21)	Flat from 7.18% a week earlier; 6th straight week of rates above 7%	Up from 6.02%	Freddie Mac
Mortgage-purchase applications (seasonally adjusted)		Up 2% from a week earlier (as of week ending Sept. 15)	Down 26%	Mortgage Bankers Association
Redfin Homebuyer Demand Index (seasonally adjusted)		Down 4% from a month earlier (as of the 4 weeks ending Sept. 17), close to its lowest level since January	Down 11%	Redfin Homebuyer Demand Index, a measure of requests for tours and other homebuying services from Redfin agents
Google searches for “home for sale”		Down 13% from a month earlier (as of Sept. 16)	Down 14%	Google Trends

Key housing-market data

U.S. highlights: Four weeks ending September 17, 2023 Redfin’s national metrics include data from 400+ U.S. metro areas, and is based on homes listed and/or sold during the period. Weekly housing-market data goes back through 2015. Subject to revision.
	Four weeks ending September 17	Year-over-year change	Notes
Median sale price	$374,975	3.4%	Smallest increase in a month. Median sale prices are up partly because elevated mortgage rates were hampering prices during this time last year.
Median asking price	$386,589	4.5%	Biggest increase in nearly a year
Median monthly mortgage payment	$2,661 at a 7.19% mortgage rate	12%	All-time high
Pending sales	78,750	-12.7%
New listings	81,732	-6.7%	Smallest decline in over a year, but that’s partly because new listings fell rapidly at this time in 2022
Active listings	806,701	-16.2%
Months of supply	3.1 months	Unchanged	Highest level since March. 4 to 5 months of supply is considered balanced, with a lower number indicating seller’s market conditions.
Share of homes off market in two weeks	38%	+0.3 pts.
Median days on market	30	-1 day
Share of homes sold above list price	32.3%	Unchanged
Share of homes with a price drop	6.4%	+0.3 pts.
Average sale-to-list price ratio	99.5%	+0.2 pts.

Metro-level highlights: Four weeks ending September 17, 2023 Redfin’s metro-level data includes the 50 most populous U.S. metros. Select metros may be excluded from time to time to ensure data accuracy.
	Metros with biggest year-over-year increases	Metros with biggest year-over-year declines	Notes
Median sale price	Miami (14.4%) San Diego (11.5%) Anaheim, CA (11.1%) Newark, NJ (11%) New Brunswick, NJ (9.8%)	Austin, TX (-4.5%) Fort Worth, TX (-2.2%) Phoenix (-1.7%) San Antonio, TX (-1.6%) Portland, OR (-1.2%)	Declined in 8 metros
Pending sales	n/a	Seattle (-25.8%) San Antonio, TX (-24.7%) Atlanta (-24.4%) San Diego (-23.2%) Sacramento, CA (-21.7%)	Declined in all metros
New listings	Miami (3.2%) Milwaukee (2.6%) San Jose, CA (2.3%) Houston (1.8%) San Antonio, TX (1.3%)	Atlanta (-28.2%) Las Vegas (-22%) Riverside, CA (-21.2%) Portland, OR (-20.4%) New Brunswick, NJ (-16%)	Declined in all but 8 metros