Recovery Has Begun in The Housing Market According To Redfin

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Recovery Has Begun in The Housing Market According To Redfin

Feb 13, 2023 | News | 0 comments

Recoveries have begun. Those are the words of Redfin, the digital real estate company, which released a report on Wednesday that said the market may finally have bottomed out in December.

Compared with mid-November, Redfin customers requested 17 percentage points more first tours of homes for sale. Additionally, Redfin agents are now receiving 13 points more inquiries about homebuying.

Home tours and service requests are down 23% and 27% compared with a year ago, but that’s better than a year ago when they were down 40% each, the company reports.

Applications for 30-year-fixed mortgages rose 28% from early November as mortgage rates dropped from their November peak of 7.08% to 6.15%. Among the largest declines in 10-week performance since 2009, Redfin reported a 93-basis-point drop.

There has been a slight increase in the share of Redfin agents’ offers that are subject to bidding wars this month in Seattle and Tampa, Redfin said, adding it expects it will take some time for bidding wars nationally to pick up.

The main reason for bidding wars, according to Redfin, is low inventory, even though homebuyer demand is improving.

85% of mortgage holders have an interest rate that is far below today’s level of around 6%, so buyers tend to react first to falling interest rates, followed by sellers months later.

Despite this, Redfin’s measurement of people calling its agents to sell their homes has improved, up 10 percentage points from November’s low. The number of listings has not yet increased significantly nationwide.

There’s still a long way to go before the housing market begins to thaw, according to Redfin. But it’s likely to continue if inflation and mortgage rates continue to decline.

As the number of homes for sale decreases, total sales volumes could be limited and people priced out of the market, according to Redfin.