Pending home sales jump 4.1% in December amid lower mortgage rates – Redfin (NASDAQ:RDFN)

Pending home sales in the U.S. saw the biggest monthly increase since September 2021, as lower mortgage rates lured more buyers to the housing market, online real estate brokerage Redfin (NASDAQ:RDFN) said in a report dated Friday.

On a seasonally adjusted basis, pending home sales jumped 4.1% M/M in December to the highest level in over a year.

The swing comes as the average 30-year-fixed rate mortgage dropped to 6.82% last month from 7.44% in November, marking the biggest M/M slump since 2008, Redfin (RDFN) noted.

The report said that sellers also have returned from the sidelines in the wake of lower mortgage rates, though they haven’t been as active as buyers, “likely because a majority of them don’t want to give up the ultra low mortgage rate they scored during the pandemic.”

Home prices also rose markedly, as housing supply remained below pre-pandemic levels. The median U.S. home sale price increased 4% Y/Y to $403,714 in December, the biggest annual increase since October 2022. On a M/M basis, though, the median price fell 1.1%.

“The primary driver of price increases is America’s persistent shortage of homes for sale, which is fueling competition in some areas,” the report noted.

Earlier on Friday, existing home sales unexpectedly dropped 1.0% M/M and 6.2% Y/Y in December to 3.78M.