U.
S. pending home sales decreased by 5.1% year-over-year during the four weeks ending February 8, 2025, marking the most significant decline in over a year. This trend, reported by Redfin, a technology-driven real estate company and part of Rocket Companies, indicates a broad slowdown, with pending sales dropping in 45 of the 50 most populous U.
S. metro areas.
Only a few markets saw increases: West Palm Beach, FL (9.1%), Jacksonville, FL (7.7%), Columbus, OH (1.4%), and Chicago (0.1%), while Austin, TX, remained flat. Conversely, Oakland, CA, experienced the steepest drop at 21.6%, followed by Minneapolis, MN, at 17.5%.
The housing market also saw homes taking longer to sell, with the typical U.
S. home going under contract in 66 days, a week longer than the previous year and the longest duration since early 2019. The market’s inventory reached 5.5 months of supply, the highest in seven years, indicating a shift towards a buyer’s market.
Buyer hesitation is attributed to several factors, including high housing costs, with the median sale price up 1.2% year-over-year, and mortgage rates remaining significantly higher than pandemic-era lows, despite recent declines. Concerns about job security and severe winter weather in certain regions also contributed to reduced activity. Furthermore, new listings fell 1.8% year-over-year, and the total number of homes for sale dropped approximately 1%, marking the first decline since 2023.
Despite the challenges, the market presents certain advantages for buyers. With more home sellers than active buyers, purchasers are gaining leverage in negotiations, with some successfully securing homes below asking prices. Affordability has shown slight improvement, as the median monthly housing payment decreased by 3.8% year-over-year, while average wages increased by roughly 4%.
Redfin Premier agent Sue Dhillon, based in Seattle, noted, “It’s still a buyer’s market, but it might not be for long. House hunters are getting a jump start on the spring selling season because they’re doing the math and realizing that a few things are working in their favor: Sellers are pricing lower, mortgage rates have come down slightly and aren’t likely to drop further any time soon, and rents just keep climbing. If buyers wait any longer, competition is likely to pick up.” Redfin agents in various parts of the country report an increase in home tours and more serious buyer engagement, although this is not yet fully reflected in current data.
Key housing market data for the four weeks ending February 8, 2025, revealed a median sale price of $378,725 (+1.2% year-over-year) and a median monthly mortgage payment of $2,580 at a 6.11% rate (-3.8% year-over-year). The median days on market extended to 66 days (+7 days year-over-year), the longest in six years.
Leading indicators for homebuying demand and activity showed the daily average 30-year fixed mortgage rate at 6.14% on February 11, down from 7.01% a year prior, as per Mortgage News Daily. The weekly average 30-year fixed mortgage rate was 6.11% for the week ending February 5, down from 6.89% year-over-year, according to Freddie Mac. Mortgage-purchase applications, as reported by the Mortgage Bankers Association, were down 2% from the previous week but up 4% year-over-year. The Redfin Homebuyer Demand Index saw a 16% year-over-year decline. Touring activity, measured by ShowingTime, was up 1% from the start of the year.
