Nationwide housing inventory showed a glimmer of recovery toward the end of 2024. But these new listings aren’t attracting buyers, and pending home sales dropped 4.2% month over month in January.
That finding comes from two Redfin reports released on Thursday. Each tell similar stories, albeit from different perspectives.
According to the first report, the monthly decline in pending sales was the largest on a seasonally adjusted basis since August 2023. The year-over-year decline was 6.3%. Meanwhile, active listings of homes for sale jumped 0.3% from December 2024 and 12.9% from January 2024.
More listings aren’t quite as positive as one may believe. According to Redfin, despite the decline of the mortgage rate lock-in effect, homes are remaining on the market for longer. The average home sold in January stayed on the market for 56 days. That’s an entire week longer compared to the same month a year ago. It’s also the longest time frame for the month of January since 2020.
“On a national scale, we’re seeing an increase in people selling homes and a decrease in people buying homes, bringing supply and demand closer to equilibrium. But the national snapshot masks a lot of regional variation,” Redfin senior economist Elijah de la Campa said in the report.
Redfin also found that existing-home sales fell 1.7% month over month to a seasonally adjusted rate of 4.3 million. But new listings are heading in the opposite direction, according to Altos Research data.
“I’m seeing a lot more inventory hit the market than I have in past years, but it’s not nearly enough,” Charles Wheeler, a San Diego-based Redfin Premier agent, said in the report. “Economic fears have been top of mind for people. I have sellers saying, ‘I think we’re at the top of the market — I’m ready to cash out and put my money into another investment.’”
These fears stem from several big-ticket economic developments that have hit the housing market. Mortgage rates, for example, rose to an average of 6.96% in January, according to Redfin. This represents the highest level since May 2024.
HousingWire‘s Mortgage Rates Center shows a similar upward trend, with an average rate of 7.07% for 30-year conforming loans as of Thursday.
Tariffs and federal workforce reductions are also troubling many buyers and sellers. Redfin’s second report released Thursday dives into this with agent commentary on market developments in specific areas.
According to the report, Washington, D.C., and other areas with government employees are experiencing changes due to federal return-to-work mandates.
“Since the inauguration, I’ve met with a few people, including one federal government employee, who are selling specifically because of anticipated return-to-office orders. I also spoke to a client who was looking to sell and upgrade to a larger home, but he canceled those plans because he’s worried about losing his job due to restructuring of government jobs,” said Jo Chavez, a Kansas City-based Redfin agent.
Despite stagnation in other markets, pending home sales in Los Angeles are up for the first time since last month’s wildfires struck. Redfin highlighted yearly pending home sales growth of 3.4% during the four-week period ending Feb. 9. This growth may have stemmed from the Palisades and Eaton areas, according to the report, as Redfin posited that “some affluent people who were displaced by the fires may be buying new homes.”
