As 2025 gets underway, the pace of home sales slows


SEATTLE — Elevated mortgage rates and higher home prices are slowing the pace of sales, based on research from real estate brokerage Redfin.

The typical U.S. home listing that went under contract sat on the market for 54 days, the longest span since March 2020, according to data as of the four weeks ended Jan. 26. During the pandemic-driven housing boom, a typical home sold within 35 days.

Supply is also at a high point, with 5.2 months of supply on the market, which is the most since February 2019. For the four-week period tracked, pending home sales were down 9.4% year-over-year.

Several factors were cited for the slow pace, including mortgage rates sitting at around 7%, home prices up nearly 5% year-over-year and weather extremes such as snow and cold in the Midwest, South and Northeast and wildfires in California.

For the four weeks ended Jan. 26, the median sales price was $377,125, up 4.8%, while the median monthly mortgage payment grew by 8% year-over-year to $2,753 based on a 6.96% rate.

“Prospective buyers have been cautious because they’ve seen homes sitting on the market, and they’ve heard interest rates and prices may drop,” said Jordan Hammond, a Redfin agent in Raleigh, N.C. “Now it’s pretty clear that sellers aren’t slashing asking prices and mortgage rates aren’t plummeting, so mindsets are shifting.”

Redfin economist Chen Zhao said, with the Fed’s decision on Jan. 29 not to cut the federal funds rate, mortgage rates will remain largely unchanged, although new jobs data on Feb. 7 “could bring volatility.” Zhao said the Fed is hesitant to commit to further cuts until there is more progress on inflation. The next rate is not expected until June, she said.

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