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New listings are up 7.4% from a year earlier, while pending sales are down 6%. Sales are slow mostly because of high home prices and mortgage rates.

Redfin Reports Housing Supply Is Piling Up As Home Sellers Enter the Market But Buyers Stay on Sidelines

Redfin Journalist Services:
Tana Kelley
press@redfin.com

(NASDAQ: RDFN) — There are five months of for-sale supply on the market nationwide, up from 4.4 months a year earlier and the most since early 2019. That’s according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. Inventory is piling up because more sellers are listing their homes while fewer buyers are wading into the market.

New listings rose 7.4% year over year during the four weeks ending February 9, hitting their highest level for any comparable time period since 2022. Just after this time in 2022, mortgage rates started rising quickly, encouraging many homeowners to stay put to hold onto low rates. Now, that lock-in effect is starting to ease.

Pending home sales, meanwhile, fell 6%, similar to the declines Redfin has seen since the start of the year. The typical home that sold in that period took 57 days to go under contract—the longest span since March 2020, when the onset of the pandemic nearly ground the housing market to a halt. Sales are slow mostly because housing costs are high, with the median monthly housing payment sitting just $46 below its all-time high. Home-sale prices are up 4.3% year over year, and the weekly average mortgage rate is 6.89%, down slightly from a week earlier but still more than double the average pre-pandemic and early-pandemic rates.

But more homebuyers may come out of the woodwork soon. Redfin’s Homebuyer Demand Index—a measure of tours and other buying services from Redfin agents—is up slightly from the six-month low it dropped to in late January, and agents report they’re seeing more house hunters.

“I’ve met with a lot of potential sellers over the last few weeks. Listings typically pick up in March or April, but this year it’s happening earlier,” said Fernanda Kriese, a Redfin Premier agent in Las Vegas. “Some of the sellers are listing because they bought just a few years ago and their home value isn’t increasing as quickly as they’d like, so they’re cutting their losses and moving to a less expensive home. Some are retirees who are downsizing. Buyers have been sidelined this year because of high mortgage rates and uncertainty surrounding politics and the economy, but some are starting to come off the fence.”

Redfin agents report uncertainty among buyers and sellers in areas with a lot of federal employees

Redfin agents in Washington, D.C. and other places with a high concentration of government workers report that the new presidential administration is impacting local housing markets. Return-to-office mandates for federal workers, and uncertainty about whether certain government employees will keep their jobs, are motivating some people to buy new homes, but discouraging others from buying or selling.

• “I recently worked with a couple who bought their dream home with me a few years ago, but now they’re considering listing because they want to be closer to public transportation. They both work for the government, and want a more convenient commute because they’ll need to return to in-person work soon.” —Stuart Naranch, Redfin Premier agent in Washington, D.C.
• “Since the inauguration, I’ve met with a few people, including one federal government employee, who are selling specifically because of anticipated return-to-office orders. I also spoke to a client who was looking to sell and upgrade to a larger home, but he canceled those plans because he’s worried about losing his job due to restructuring of government jobs.”—Jo Chavez, Redfin Premier agent in Kansas City, MO

Pending sales are ticking up in Los Angeles after wildfires

Pending home sales in the Los Angeles metro rose 3.4% year over year during the four weeks ending February 9, the first increase after five weeks of declines.

It’s possible the uptick stems from the Palisades and Eaton fires, which destroyed thousands of homes in the Los Angeles area in early January. Some affluent people who were displaced by the fires may be buying new homes. Please note that this is just one early data point; Redfin will keep an eye on the Los Angeles market to see how pending sales and listings shake out over the next several months.

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

Leading indicators

Key housing-market data

To view the full report, including charts, please visit: https://www.redfin.com/news/housing-market-update-listings-piling-up-pending-sales-falling

About Redfin

Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, and title insurance services. We run the country's #1 real estate brokerage site. Our customers can save thousands in fees while working with a top agent. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we've saved customers more than $1.6 billion in commissions. We serve approximately 100 markets across the U.S. and Canada and employ over 4,000 people.

Redfin’s subsidiaries and affiliated brands include: Bay Equity Home Loans®, Rent.™, Apartment Guide®, Title Forward® and WalkScore®.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email press@redfin.com. To view Redfin's press center, click here.

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