According to the National Association of Realtors This Week in Real Estate, pending home sales increased by 2.2% month-over-month in November, marking the fourth consecutive month of growth. The Pending Home Sales Index (PHSI) reached a 21-month high, with a 6.9% year-over-year increase in pending home sales. Mortgage rates rose by 6 basis points at the start of the new year, reaching the highest level in nearly six months. As of January 2, the 30-year fixed-rate mortgage averaged 6.91%, up from 6.85% the previous week, according to Freddie Mac. Inventory levels continue to rise across nearly all markets nationwide. As of the beginning of 2025, single-family home inventory is 26.8% higher than the previous year. However, there are still 23% fewer single-family homes available compared to the start of 2019. Below are key events from the final days of 2024 and the early days of 2025 that impact our business: PENDING HOME SALES MOVED UP 2.2% IN NOVEMBER, FOURTH STRAIGHT MONTH OF INCREASES. Pending home sales gained 2.2% in November – the fourth consecutive month of increases and the highest level since February 2023 – according to the National Association of REALTORS®. The Pending Home Sales Index (PHSI) – a forward-looking indicator of home sales based on contract signings – advanced 2.2% to 79.0 in November. Year-over-year, pending transactions improved 6.9%. “Consumers appeared to have recalibrated expectations regarding mortgage rates and are taking advantage of more available inventory,” said NAR Chief Economist Lawrence Yun. “Mortgage rates have averaged above 6% for the past 24 months. Buyers are no longer waiting for or expecting mortgage rates to fall substantially.” Read the full story here.MORTGAGE RATES HIT SIX-MONTH HIGH. According to Freddie Mac’s Primary Mortgage Market Survey (PMMS ®), as of January 2, 2025, mortgage rates have surged to their highest point in nearly six months, with the 30-year fixed-rate mortgage (FRM) averaging 6.91%. This marks an increase from the previous week’s rate of 6.85%. Freddie Mac Chief Economist, Sam Khater, noted that while mortgage rates are still up from the previous year, the market is showing signs of resilience. “Inching up to just shy of seven percent, mortgage rates reached their highest point in nearly six months. Compared to this time last year, rates are elevated, and the market’s affordability headwinds persist,” Khater said. “However, buyers appear to be more inclined to get off the sidelines as pending home sales rise.” Despite the ongoing affordability challenges caused by higher mortgage rates, the housing market is seeing a surprising uptick in activity. Read the full story here.THE TWO BIG HOUSING MARKET TRENDS TO WATCH IN 2025. There are two big trends that stand out as we launch into 2025 – affordability and sellers in the market. In 2025, housing affordability in the U.S. remains at it’s worst levels in decades. In the last few months, the market finally saw some sales growth over the previous year. The other trend to watch is whether we finally have more sellers entering the market in 2025. The three years in the post-pandemic housing market have been marked by very few sellers – 60,000 new listings in a given week vs. 80,000 in years’ past. There are some signals that seller volume is starting to creep back to normal levels. There are now 651,000 single-family homes unsold on the market across the U.S. – 26.8% more than last year. The thing to keep an eye on is that each week in December, we had much more “normal” levels of new listings each week. When we look at sales volumes, there are 269,000 single-family homes under contract. That’s 4.25% more than where we ended 2023. Let’s move on to home prices and the affordability challenge. When inventory of unsold homes is building around the country, and when affordability is at crisis levels – home prices have not fallen. In fact, they’re inching up. The important lesson from the data is that while affordability is the paramount issue for homebuyers, we haven’t seen any signal that the price of homes will correct down. Read the full story here.
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