Pending-Home Sales Fall for First Time in 3 Months

Despite mortgage rates recently falling to their lowest point in nearly a year, homebuyers didn't bite. According to recent data from real estate marketing platform Redfin, pending-home sales fell by roughly 1% from a year earlier during the four weeks ending Sept. 21, marking the first decline in nearly three months. Meanwhile, homeowners appear to be taking advantage of lower rates, with mortgage applications to refinance homes growing by 58% during the second week of September.

Why isn’t homebuying demand improving?

Affordability and uncertain economic conditions are likely the cause of would-be homebuyers pulling back. Currently, the median U.S. home-sale price is up 2.2% year-over-year, which is the biggest increase in nearly six months. Additionally, there aren’t as many home listings to choose from. New listings of homes for sale have been flat year-over-year for the past two months.

Not all housing markets are seeing pending-home sales fall

Despite nationwide trends, some metros are seeing a surge in home sales. San Francisco—which also saw the median home price drop by 6.3% year-over-year—saw pending sales rise by more than 12%. Anaheim, Calif., and Riverside, Calif., also saw pending sales rise by a respective 7.7% and 7.1% year-over-year.

Meanwhile, pending-home sales in Houston, Las Vegas, and Denver, fell by a respective 14.4%, 11.1%, and 9.9% year-over-year.

What impact has low buyer interest had on the housing market? 

• Weak Homebuyer Demand Causes Surge in Delistings: With lower demand from buyers, sellers are beginning to pull their homes off the market. Nationwide delisitings in May grew by 47% year-over-year. 
• Home Builders Report Less Buyer Demand: Home builders are also reporting less buyer demand for new-home communities. In a recent April survey, the share of builders reporting negative sales increased to 25%.