New listings rose 8 percent toward the end of the year, but high mortgage rates and home prices have kept buyers on the sidelines as homes spend more time on market, reports say.
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New listings rose 8 percent toward the end of 2024, while high prices and mortgage rates kept a lid on homebuyer demand, according to a new report from Redfin.
Rates hovering around 7 percent put a damper on demand, and both pending home sales and mortgage purchase applications fell, according to the report released on Friday morning.
Mortgage purchase applications were down 17 percent compared to a year ago, according to a weekly survey by the Mortgage Bankers Association.
The number of active listings was 9.7 percent higher than a year ago, Redfin said, as the nation moved into a balanced market with 4.2 months of housing supply.
Homebuyer demand was down 1 percent compared to a year ago, according to Redfin’s Homebuyer Demand Index, which measures indicators like tours and other homebuying services requested from Redfin agents.
Median sales prices, meanwhile, rose 6.4 percent in the four weeks ending Dec. 29, to $383,750. That was the largest increase since October 2022, Redfin said.
The daily average 30-year mortgage rate was at 7.07 percent, up from 6.7 percent a year ago.
In a report released on Thursday, Realtor.com economists attributed the slowdown to the rise in mortgage rates between November and December.
“Though rates are significantly higher today than they were just a few months ago, our 2025 forecast shows that as both lower rates and time chisel away at the ‘lock-in’ effect that has held back sales this year, we should expect home sales to rise modestly by 1.5 percent in 2025,” Realtor.com said in its report.
Both reports indicated that homes are spending more time on the market than last year but still remain below pre-pandemic levels.