After peaking at 7.29% a month earlier, daily mortgage rates dipped to 6.29% on December 1, and as a result, mortgage-purchase applications are up 4% from a week ago and Redfin’s Homebuyer Demand Index is up 1.5% on a monthly basis. A slight improvement in affordability is causing a gradual increase in buyer demand, but until a nationwide market correction more effectively slows sales and prices, buyers and sellers are still daunted by historically high housing costs, Redfin reports.
Months of supply surged to 4.1 months during the four weeks ending November 27, while home prices are falling in 10 of the nation’s 50 most populous metros, but measures of homebuyer demand remain low compared to the same time period one year ago.
“There have been a handful of pieces of relatively good news for the housing market lately, but we’re far from out of the woods. Key indicators of homebuying demand will likely be teetering on a knife’s edge with every data release that comes out related to the Fed’s path to eventually bringing rates down,” said Redfin Deputy Chief Economist Taylor Marr.
Among the 50 most populous U.S. metros, home-sale prices fell from a year earlier in 10 of them. Prices fell 8.2% year over year in San Francisco, 2.8% in San Jose, CA, 2.7% in Pittsburgh, 2.3% in Detroit, 1.7% in Sacramento and 1.3% in Austin. They declined less than 1% in Chicago, San Diego, Los Angeles and Philadelphia.