New listings of homes for sale the four weeks ending Dec. 15 were up 7.6 percent, the biggest year-over-year increase since June (excluding the four weeks ending Nov. 24, when the increase was inflated due to Thanksgiving), according to a new report from Redfin.
Redfin said there are several reasons more sellers are putting their homes on the market. One, home prices are high; the median U.S. home sale price is up 6 percent year-over-year, the second-biggest increase since October 2022.
Two, consumer confidence rose to a 16-month high after November’s election, motivating more sellers to make the major financial decision to list their homes. And finally, some sellers are hoping to take advantage of increased homebuying demand.
Demand also appears to be strengthening. Redfin’s Homebuyer Demand Index is up 9 percent year-over-year and is sitting near its highest level since August 2023. Mortgage-purchase applications are up 18 percent month-over-month, and pending home sales are up 4.1 percent, similar to the increases Redfin has seen over the last few months.
Like sellers, many homebuyers are feeling more confident about making a big financial move after the summer and early fall slump. Declining mortgage rates are another reason more buyers are coming off the fence: The weekly average rate has declined for three weeks in a row to a two-month low of 6.6 percent. It’s worth noting that mortgage rates may have bottomed out for the time being. Daily average rates rose above 7 percent on Dec. 18 after the Fed signaled it will cut interest rates twice in 2025, instead of four times.
“We’re having a busier winter than usual; I have a handful of listings ready to hit the market right after the new year. This time last year, it was crickets,” David Palmer, a Redfin Premier agent in the Seattle area, said in a release. “Buyers are coming out of the woodwork because they’ve accepted that rates in the 6 percent to 7 percent range are the new normal, and they know that if they wait to buy, mortgage rates will probably stay the same, but prices will be higher.”