Redfin Reports Pending Home Sales Decline Due to High Housing Costs, California Wildfires and Frigid Weather in Other Parts of U.S.

Pending sales posted their biggest decline in over a year this week, as did new listings. But mortgage-purchase applications are on the rise, and mortgage rates are coming down.

(NASDAQ: RDFN) — Home tours and pending sales are falling as devastating wildfires burn in Southern California, extreme cold and snow hit the Northeast, Midwest and South, and housing costs rise across the country. That’s according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.

Redfin’s Homebuyer Demand Index—a seasonally adjusted measure of tours and requests for other buying services from Redfin agents—is down 11% month over month to its lowest level since August. Pending home sales fell 8.4% year over year during the four weeks ending January 12, the biggest decline since October 2023. Prospective sellers are also sitting on the sidelines, with new listings posting their biggest annual decline since September 2023.

But there are some pieces of encouraging news for homebuyers and the housing market. Mortgage rates are falling after the latest CPI report showed softer-than-expected core inflation, perhaps bringing some relief to hopeful buyers. And mortgage-purchase applications jumped this week to their highest level in nearly a year, signaling that pending sales may improve in the weeks to come. It’s also worth noting that it’s too early in the new year to determine how 2025’s housing market will shape up.

For now, high housing costs are one reason pending sales are declining. Many would-be buyers are priced out, with the median housing payment nationwide sitting at its highest level in over two months. Home sale prices are up 5.8% year over year, and daily average mortgage rates hit their highest level since May this week after a surprisingly strong jobs report before the CPI report reversed the course of rates.

Los Angeles wildfires push down sales, listings, but agents report people displaced from homes are scrambling to find housing

The wildfires are simultaneously pushing down homebuying demand and listings in the Los Angeles metro, and driving up buying and rental demand from the pocket of people who have been displaced from their homes. During the four weeks ending January 12, Los Angeles pending sales fell 4% year over year and new listings fell 2.5%. Redfin Economic Research Lead Chen Zhao said sales and listings in Los Angeles would have posted smaller declines if not for the fires and that Redfin will likely see bigger declines in the coming weeks.

But local real estate agents are reporting a surge in demand—especially for rentals—from people who have been directly impacted by wildfire damage. Many of the thousands of Los Angeles residents who have lost their homes are competing for rentals and listings in the area.

“There’s a feeling of overwhelming sadness and stress about the destruction we’re seeing in so many neighborhoods,” said Susan Brown, a Redfin Premier agent in the Los Angeles area. “Part of that is because so many people now have to find new homes, and we’re seeing a chaotic ripple effect in the market. I’ve personally had three people who lost their homes reach out to me to start searching, and we all have an influx of clients looking for rental properties. Many Redfin agents are pivoting to helping people find rentals as soon as possible. Because rentals are going so fast, my advice for people searching for housing is to directly reach out to a real estate agent for help.”

Cold, snow slowing housing market in the Northeast, Midwest

In much of the rest of the country, frigid temperatures and snow are keeping house hunters at home, and delaying homeowners from listing.

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

7.13% (Jan. 15)

Rates hit 7.26% this week, the highest level since May, then declined slightly

Up from 6.88%

Mortgage News Daily

Weekly average 30-year fixed mortgage rate

6.93% (week ending Jan. 9)

Highest level since July

Up from 6.66%

Freddie Mac

Mortgage-purchase applications (seasonally adjusted)

 

Up 27% from 1 week earlier (as of week ending Jan. 10)

Down 2%

Mortgage Bankers Association

Redfin Homebuyer Demand Index (seasonally adjusted)

 

Down 11% from a month earlier to lowest level since August

(as of week ending Jan. 12)

Up 6%

 

 

Redfin Homebuyer Demand Index, a measure of tours and other homebuying services from Redfin agents

Google searches for “home for sale”

 

Up 35% from a month earlier (as of Jan. 13)

Down 4%

 

Google Trends

Key housing-market data

U.S. highlights: Four weeks ending Jan. 12, 2025

Redfin’s national metrics include data from 400+ U.S. metro areas, and are based on homes listed and/or sold during the period. Weekly housing-market data goes back through 2015. Subject to revision.

 

Four weeks ending Jan. 12, 2025

Year-over-year change

Notes

Median sale price

$379,609

5.8%

 

Median asking price

$383,473

4.7%

 

Median monthly mortgage payment

$2,586 at a 6.93% mortgage rate

7.5%

Highest level since October

Pending sales

49,136

-8.4%

Biggest decline since October 2023

New listings

47,890

-3.6%

Biggest decline since September 2023

Active listings

873,497

9.8%

Smallest increase in nearly a year

Months of supply

4.6

+0.3 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

22%

Down from 25%

 

Median days on market

50

+6 days

 

Share of homes sold above list price

21.7%

Down from 23%

 

Average sale-to-list price ratio

98.2%

Essentially unchanged

 

Metro-level highlights: Four weeks ending Jan. 12, 2025

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

Milwaukee (20.4%)

Cleveland (14.1%)

Warren, MI (13.1%)

Pittsburgh (12.9%)

Newark, NJ (12.9%)

Austin, TX (-4.1%)

San Francisco (-3.1%)

Tampa, FL (-0.5%)

Declined in 3 metros

Pending sales

Anaheim, CA (1.8%)

New Brunswick, NJ (0.6%)

Newark, NJ (-18.3%)

New York (-17.8%)

Detroit (-16.7%)

Minneapolis (-16.5%)

Nashville, TN (-16.2%)

Increased in 2 metros

 

 

New listings

San Jose, CA (13.1%)

Phoenix (12%)

Seattle (9.5%)

Jacksonville, FL (8.4%)

Anaheim, CA (6.5%)

Newark, NJ (-27%)

Detroit (-22.8%)

Austin, TX (-20.8%)

Warren, MI (-20.1%)

San Antonio (-18.7%)

Increased in 17 metros

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

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 [e-mail]. To view Redfin's press center, click here.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250116834213/en/

Contact Redfin Redfin Journalist Services: Tana Kelley [e-mail]