Low mortgage rates prop up homebuyer demand as inventory declines
U.S. home-sale prices increased 5.4% year over year in October to a median of $313,200 across the 217 metros Redfin tracks. The increase was the largest since July 2018, although current strength may be overstated given the weakening housing market a year ago. Prices also rose 1.4% between September and October, a time of year when they usually flatten. This is the largest month-over-month increase in an October we’ve seen since at least 2012.
“Low mortgage rates are propping up homebuyer demand and juicing prices, said Redfin chief economist Daryl Fairweather. “However, home sales have been slow to grow since there are so few homes for sale and not many new listings hitting the market, especially affordable ones. The market is split: It’s a seller’s market for moderately priced homes, but a buyer’s market for pricier homes.”
Of late Redfin is showing an interesting data point on home listing pages. I noticed it while looking at a $2M home listing in San Jose. It shows how many others are searching for homes in that price range in that neighborhood. Guess how many in West San Jose for $2M. It was about 10 thousand searches. There are not even 10 homes for sale. Is this an indication of pending demand?
By the way, if you want to see that search number you won’t be able to find it on every listing (at least not yet). My friend signed up as a Redfin user and registered his home with his account. Then when he was showing me his home from his logged in account, it showed this search number.
