High Mortgage Rates and Harsh Weather Impacting Home Sales, but Some House Hunters Remain Active
Despite high mortgage rates and severe weather conditions, there are still house hunters who are actively exploring the housing market. The housing market in 2024 began with some challenges, as daily average mortgage rates experienced their largest one-day increase in over a year on February 2. This jump followed a stronger-than-expected January jobs report and confirmation from the Federal Reserve that interest rates are unlikely to be reduced in the next two months.
The combination of rising mortgage rates and increasing home prices is making it difficult for potential homebuyers to enter the market. The typical monthly mortgage payment is currently just $100 shy of the all-time high reached in October. In the four weeks leading up to February 4, the median sale price in the United States increased by 5.4% compared to the previous year, marking the biggest increase in over a year. As a result, many prospective buyers are being priced out of the market, leading to an 8% decline in pending sales, the largest decrease in four months.
Other factors contributing to the decrease in home sales include harsh winter weather during the first half of January, which delayed many homebuying deals, and the previous year’s temporary drop in mortgage rates, which caused an uptick in pending sales at that time.
Despite these challenges, there are still house hunters who are actively exploring the housing market. Redfin’s Homebuyer Demand Index, which measures requests for tours and other buying services from Redfin agents, has consistently increased since mid-January. Additionally, home tours have increased by 16% since the beginning of the year, compared to a 10% rise during the same period last year. Sellers have also shown increased activity, with new listings up by 7% compared to the previous year.
However, despite the modest recovery in house hunting activity, demand at this stage is not as high as expected for this time of year. This is attributed to the climbing mortgage rates and harsh winter weather conditions that have deterred some potential buyers from actively participating in the market.
Local real estate agent Luis Rojas, who works in the Viera West, FL area, describes the current housing market as uncertain. Rojas advises buyers, especially first-time buyers, that the mortgage rates seen in the news are not the only factor to consider. Some local lenders are willing to offer rates in the 5% range for new construction projects as they prefer any business over none at all.
Leading Indicators of Homebuying Demand and Activity
| Indicators of Homebuying Demand and Activity | ||||
| Value (if applicable) | Recent Change | Year-over-Year Change | Source | |
| Daily Average 30-Year Fixed Mortgage Rate | 6.92% (Feb. 7) | Up from 6.75% a week earlier | Up from 6.39% | Mortgage News Daily |
| Weekly Average 30-Year Fixed Mortgage Rate | 6.63% (week ending Feb. 1) | Near the lowest level since May | Up from 6.09% | Freddie Mac |
| Mortgage-Purchase Applications (Seasonally Adjusted) | Down 1% from a week earlier; up 3% from a month earlier (as of week ending Feb. 2) | Down 19% | Mortgage Bankers Association | |
| Redfin Homebuyer Demand Index (Seasonally Adjusted) | Up slightly from a week earlier, but down 7% from a month earlier (as of week ending Feb. 4) | Down 14% | Redfin Homebuyer Demand Index (measure of requests for tours and other homebuying services from Redfin agents) | |
| Google Searches for “Home for Sale” | Down 2% from a month earlier (as of Feb. 3) | Down 16% | Google Trends | |
| Touring Activity | Up 16% from the start of the year (as of Feb. 6) | Up 10% from the start of 2023 | ShowingTime (a home touring technology company) | |
Key Housing Market Data
| U.S. Highlights: Four Weeks Ending February 4, 2024 | |||
| Four Weeks Ending February 4, 2024 | Year-over-Year Change | Notes | |
| Median Sale Price | $361,498 | 5.4% | Biggest Increase since Oct. 2022 |
| Median Asking Price | $395,949 | 7% | Biggest Increase since Sept. 2022 |
| Median Monthly Mortgage Payment | $2,607 at a 6.63% mortgage rate | 11.5% | Down approximately $110 from the all-time high in October 2023, but up approximately $250 from the four weeks ending Dec. 31 |
| Pending Sales | 68,872 | -7.8% | Biggest Decline since Oct. 2023 |
| New Listings | 70,415 | 6.6% | |
| Active Listings | 740,834 | -3.5% | |
| Months of Supply | 4.2 months | Unchanged | 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 | 33.3% | Up from 32% | |
| Median Days on Market | 48 | -2 days | |
| Share of Homes Sold Above List Price | 22.4% | Up from 20% | |
| Share of Homes with a Price Drop | 5.5% | +1 pt. | |
| Average Sale-to-List Price Ratio | 98.2% | +0.5 pts. | |
Metro-level Highlights: Four Weeks Ending February 4, 2024
| Metro-level Highlights | |||
|---|---|---|---|
| Metros with Biggest Year-over-Year Increases | Metros with Biggest Year-over-Year Decreases | Notes | |
| Median Sale Price |
Miami (13.4%) Anaheim, CA (13.4%) Detroit (13.3%) Warren, MI (12.1%) Chicago (11.3%) |
San Antonio, TX (-4.7%) Austin, TX (-3.7%) |
Decreased in 2 metros |
| Pending Sales | San Jose, CA (13.8%)
San Francisco, CA (6%) Anaheim, CA (4.5%) Riverside, CA (0.4%) Columbus, OH (0.2%) |
San Antonio, TX (-33.2%)
Portland, OR (-30.2%) Nashville, TN (-21.5%) New Brunswick, TN (-19.4%) Houston (-18.5%) |
Increased in 5 metros |
| New Listings | Dallas, TX (27.1%)
Miami (26.9%) Jacksonville, FL (26.3%) Fort Lauderdale, FL (23.6%) San Diego, CA (22.1%) |
Chicago (-17.8%)
Atlanta (-16%) Milwaukee, WI (-14%) Portland, OR (-13.6%) Nashville, TN (-10.4%) |
Decreased in 14 metros |
For a deeper understanding of the metrics used in this report, please refer to our metrics definition page.
