Pending sales posted their first annual decline since June 2020, stalled due to a lack of supply. Early spring has the potential to be even hotter and more volatile: stock-market declines, mortgage-rate increases and mounting affordability pressures may eventually leave overpriced listings piling up on the market.
Homebuyers are grappling with the hottest January on record, as 45% of homes now find a buyer within two weeks on the market. Thirty-five percent go under contract within a week. Both rates are the highest we’ve ever seen for this time of year.
Despite the market’s unprecedented intensity, pending home sales were down 1% during the four weeks ending January 23, the first year-over-year decline since June 2020. The stalling sales are not for a lack of buyers–the Redfin Homebuyer Demand Index was up 9%—but rather a lack of sellers.
“Buyers who have been looking for a home since last year are tired of the search and just want to be done,” said Indianapolis Redfin real estate agent Jill Thompson. “Many sellers seem to be waiting until spring, so the inventory shortage is especially intense right now, leading to a renewed surge of bidding wars and buyers making offers that waive inspection and financing contingencies.”
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