Rising Mortgage Rates Haven’t Yet Slowed Pending Sales

by Jim Marks

Pending home sales posted their biggest increase since 2021 this week. But some house hunters are starting to pull back.

Home sales are rising. Pending U.S. home sales rose 3.2% year over year during the four weeks ending October 13, the biggest increase in three years. On a local level, pending sales are up in 34 of the 50 most populous U.S. metros, with the biggest increases in California and in Portland, OR. Sales have improved over the last month because mortgage rates fell to a two-year low at the end of September amid the Fed’s highly anticipated interest-rate cut. Please note that we’re comparing to a period in 2023 when sales slumped as mortgage rates approached a two-decade high.

Mortgage rates are rising. Mortgage rates have ticked up over the last few weeks, largely due to a stronger-than-expected jobs report on October 4: The weekly average 30-year rate is 6.32%, compared to 6.08% during the last week of September. Home prices are also rising, with the median sale price posting a 4.7% year-over-year increase, the biggest uptick since March. That has pushed the typical homebuyer’s monthly payment up nearly $100 from a month ago.

Home tours and mortgage-purchase applications have flattened out. Rising rates have slowed demand somewhat at earlier stages of the homebuying process. Some would-be buyers seem to be waiting for rates to come back down: Redfin’s Homebuyer Demand Index–a measure of tours and other buying services from Redfin agents–has fallen marginally from the six-month high it hit two weeks ago, though it is up 7% year over year. And mortgage-purchase applications are down 7% week over week, but they are still trending up from a year ago.

Sellers are taking a small step back as rates rise: New listings are up 3.6% nationwide, the smallest year-over-year increase in a month.

“So far, higher rates haven’t slowed buyers down in the Minneapolis area. But buyers are negotiating more heavily than they have in years, trying to shave money off the home price because they’re taking on a pretty high rate,” said Emily Olson, a Redfin Premier agent in Minneapolis. “It’s a good strategy, because sellers are receptive to it. Sellers know every buyer taking on a mortgage is contending with high rates, and they would rather get their house sold now than let it linger on the market going into the holiday season.”

For Redfin economists’ takes on the housing market, please visit Redfin’s “From Our Economists” page.

Leading indicators

Indicators of homebuying demand and activity
	Value (if applicable)	Recent change	Year-over-year change	Source
Daily average 30-year fixed mortgage rate	6.63% (Oct. 16)	Near highest level in 3 months	Down from 7.69%	Mortgage News Daily
Weekly average 30-year fixed mortgage rate	6.32% (week ending Oct. 10)	Up from 2-year low of 6.08% 2 weeks earlier	Down from 7.57%	Freddie Mac
Mortgage-purchase applications (seasonally adjusted)		Down 7% from a week earlier (as of week ending Oct. 11)	Up 7%	Mortgage Bankers Association
Redfin Homebuyer Demand Index (seasonally adjusted)		Up 6% from a month earlier (as of week ending Oct. 13)	Up 7% Biggest increase in over a year	Redfin Homebuyer Demand Index a measure of tours and other homebuying services from Redfin agents
Touring activity		Down 2% from the start of the year (as of Oct. 13)	At this time last year, it was down 12% from the start of 2023	ShowingTime, a home touring technology company
Google searches for “home for sale”		Up 4% from a month earlier (as of Oct. 13)	Down 4%	Google Trends

Key housing-market data

U.S. highlights: Four weeks ending Oct. 13, 2024 Redfin’s national metrics include data from 400+ U.S. metro areas, and is based on homes listed and/or sold during the period. Weekly housing-market data goes back through 2015. Subject to revision.
	Four weeks ending Oct. 13, 2024	Year-over-year change	Notes
Median sale price	$384,412	4.7%	Biggest increase since March
Median asking price	$399,675	6%	Biggest increase in 2 years
Median monthly mortgage payment	$2,566 at a 6.32% mortgage rate	-4.5%	Up from $2,489 a month earlier
Pending sales	76,447	3.2%	Biggest increase in nearly 3 years
New listings	85,943	3.6%
Active listings	1,024,565	16%	Smallest increase since March
Months of supply	4	+0.6 pts.	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	33.8%	Down from 39%
Median days on market	39	+6 days
Share of homes sold above list price	26%	Down from 30%
Average sale-to-list price ratio	98.8%	-0.3 pts.

Metro-level highlights: Four weeks ending Oct. 13, 2024 Redfin’s metro-level data includes the 50 most populous U.S. metros. Select metros may be excluded from time to time to ensure data accuracy.
	Metros with biggest year-over-year increases	Metros with biggest year-over-year decreases	Notes
Median sale price	Fort Lauderdale, FL (11.2%) Milwaukee (10.7%) Providence, RI (10.1%) Chicago (10.1%) Nassau County, NY (10.1%)	Austin, TX (-4.6%) San Antonio (-1.7%) Nashville, TN (-0.6%) Tampa, FL (-0.5%) Fort Worth, TX (-0.1%)	Declined in 5 metros
Pending sales	Portland, OR (17.8%) Los Angeles (16%) Anaheim, CA (15.7%) San Jose, CA (15.5%) Seattle (14.4%)	Tampa, FL (-27.5%) West Palm Beach, FL (-18.4%) Fort Lauderdale, FL (-14.5%) Miami (-13.8%) Orlando, FL (-12%)	Increased in 34 metros The last time pending sales increased in this many metro areas was in May 2021
New listings	San Jose, CA (22.2%) Phoenix (19.5%) Sacramento, CA (18.1%) Seattle (17.9%) Baltimore, MD (16%)	Tampa, FL (-36.1%) Atlanta (-17.3%) West Palm Beach, FL (-13.2%) Orlando, FL (-12%) Fort Lauderdale, FL (-6.9%)	Declined in 11 metros