Pending home sales rose 2.9% nationwide on a seasonally adjusted basis in December, the first monthly increase since October 2021, Redfin reports. Pending sales are still down on a year-over-year basis but are falling at a much slower pace as homebuyers gradually return to the for-sale market thanks to lower mortgage rates.
After slowing to a near-halt in the fall of 2022, homebuyer activity is rebounding in the first month of 2023, but a lack of new listings means that prospective buyers have few options and are once again engaging in heated bidding wars for available homes.
“The small uptick in pending sales suggests some homebuyers returned to the market at the tail end of 2022 after demand plummeted in the fall,” said Redfin Economics Research Lead Chen Zhao. “That’s mostly because slowing inflation has driven mortgage rates down to about 6% from a peak of over 7%, giving buyers some relief and sending the typical buyer’s payment down nearly $200. Along with the dollar decline in monthly payments, rates traveling down instead of up are helping some sidelined buyers get back into a house-hunting mindset.”
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