Home Sellers Are Backing Out: Highest Rate in a Decade

Welcome back. In today's video, we're going to talk about an update from Redfin. They actually announced that delistings, in other words, home sellers taking their houses off the market, has reached multi-year highs. On top of that, we're going to talk about home prices, inventory, home sales, and much, much more, also based on a new report from Redfin as well. And we're going to go over a big update regarding mortgage rates as well. So if you guys are new here, please subscribe if you haven't done so already. And also check out my website, which is realestateteamfinder.com, if you're looking to get connected to a great real estate agent in your neck of the woods. So with that said, let's begin today's video. It's actually been a while since I've made a video regarding Redfin. It says delistings jump 28% as home sellers pull homes off the market rather than settle for low home prices. The number of home listings that were pulled off the market rose to a historically high level in September. A delisting means when a home seller, they list their home for sale, they don't get an offer, and they take their house off the market. It says sellers are delisting because so many listings are going stale. In other words, if they're sitting on the market, they're not getting a buyer. Many homeowners would rather stay put than accept a offer. The increase in delistings is propping up home prices. I think that we're trying to see here is that when you have supply going down, that puts upper pressure on home prices. If we saw a historical high level of new listings with a historically low level of delistings, that would cause a downward pressure on home prices. So nationwide, 5.5% of total listings were delisted in September, the highest September rate in about a decade. It's about eight years to be exact. So nearly 85,000 home sellers took the houses off the market in September, up 20% from September of 2024, the highest level for that month in eight years. I like how they share how this month compares to the same month in years past because there's historical fluctuations. Delistings, I would imagine probably peak in like December when people want to take their houses off the market right before the holiday season. So here's a look at delistings since September of 2016. So when Redfin says historical, their data really only goes back to 2015 and 2016. So it says the number of US homes for sale that got delisted was about 84,000, a lot higher compared to the past several years. But we're right in line with approximately September of 2017, not too much lower than those levels. And going back here, it says for this analysis, a home is considered delisted if it went off the market for more than 31 days before selling or going under contract as pending or contingent. So in other words, if the home was listed for sale for 31 days, at least 31 days, and it didn't go pending, in other words, they didn't accept an offer from a buyer or it didn't go contingent, which also is another way of saying they accept an offer from home buyer. If they didn't go pending with about 31 days of being listed and they delisted after that, that is called a delisting. To me, this all kind of makes sense given the fact that I think the last time I read was about 75% of homeowners had a mortgage rate of less than 5%. So if they're not getting their offer or not getting their asking price, then a lot of people are really not motivated to sell because if they were to sell, they're going to give up that historically low rate. And also home prices have been relatively flat for about three years. So if you bought a home, let's just say in like Austin, Texas or Southwest Florida back in the spring home buying season of 2022, you may be underwater as well. So maybe you have these people who are trying to list their houses for sale for a higher price because they would otherwise lose money. They also say here that it may be due to slow demand. Listings are going stale because of slow home buying demand. So in other words, stale meaning it's for sale, but it's been sitting on the market for quite some time. Would be buyers are sidelined by high rates, high home prices and widespread economic uncertainty. So it says here, listings are going stale because of slowing home buying demand. I mean, as I note right here, let's be real because if a home is priced right, in other words, for a reasonable price, a home is going to sell. So the biggest reason in my personal opinion, you guys comment below regarding this, is the biggest reason for homes being delisted or going stale is due to the fact that the asking price is too high. If the asking price was more reasonable, they'd get their house sold, right? So in my opinion, houses going stale is from really home buying demand being at low levels, but more importantly, because the asking price was already too high. Again, let me know if you guys think differently, or if you guys agree with me, leave me a comment below. It also says here that roughly 15% of homes that were delisted in September were at risk of selling at a loss. If you bought a home in spring 22, you paid for over the price value, then you could be underwater if you put down a minimal down payment, right? Many of those sellers likely made the difficult decision to pull their house off the market because they weren't willing to lose money. Active listings rose 8% year over year in September, the highest level for that month since 2019. When of course you have more houses on the market, you tend to see more stale listings and also delistings as well. All right, moving on, let's talk about what's happening regarding all these other figures here, because delistings is an important one because if we didn't see a huge amount of people delisting, then we'd see a bigger increase in supply, which puts more downward pressure on home prices. But more people delistings puts upward pressure on home prices, right? So let's read on here. I haven't actually read a Redfin report in quite some time. I used to make a video regarding Redfin every single week. So it's kind of fun to talk about these other videos that you actually used to make. So it says here daily average third year fixed rates. So this is according to the mortgage news daily. So this is actually a big update because rates have been coming down quite some time or have been coming down from about 12 months ago. So according to them, they actually have a daily survey. They survey lenders across the country, ask them, hey, what's your best rate for someone putting 20% down? They have a great credit score. They're looking to buy their home that they want to live in. So it's not an invested property. So based on their daily survey, they provide an average of what all those lenders came back at. So for a 30 year fix, the average today, which is what day is it? It is actually Wednesday, Wednesday, November 26, 6.22% for a 30 year fix. Jumbo is at 6.4%. This is high balance loans and FHA and VA loans is just under 5.9%. If you actually go here, click on 30 year fix, and I'll provide a link below if you guys want to have access to this. This is public information. You can see here how the rates have been coming down for quite some time. We were in the sevens in May and also in January to start the year, but we have been kind of seeing this like downward trajectory right now. And right now we're really close to a multi year lows. As you can see right here, rates have been fluctuating at around six to about 8%. I mean, remember that we had 8% was the average rate back in October 19th of 2023. Ever since then, kind of this kind of like downward trajectory, but way different compared to what we saw in 2021 average rate 2.8%. Then it surged to 7.3% by the time we hit October 21st, 2022. So in any case, looking at one year ago, the average rate was 6.95%. So rates have decreased approximately 73 basis points from 12 months ago. All right, moving on. Let's talk about applications for home loans that rose by 20%. This is from the MBA. Another report I actually used to share all the time, just posted today. And this covers the week ended November 21st. So what they actually look at is the amount of people who are applying for loans to refinance or to get a home loan to buy a house, a purchase application. So if you scroll down here, it says the refinance index, people who are applying for loans to refi their current loans, decrease 6% from last week. But look at this, up a staggering 117% from the same week one year ago, likely due to the fact that rates one year ago were about 73 basis points higher than they are today. Now looking at their purchase index, that was 20% higher compared to one year ago. They also provided this as well because a bigger share of people who are applying for a loan are actually using that to refinance. So there's actually more people at all the applications. There's more people who are looking to apply for a refi than purchase right now, pretty wild. This figure, when I was making these videos all the time, that was around 35% were refis and the remainder were people who were looking to buy a house. And now it's 55% were refis and the remainder 45% were looking to buy a house. Also the arm share of activity, adjustable rate loans. This is when you have a short-term fixed rate and thereafter it becomes variable. In other words, it adjusts after that. So it's a much more risky loan compared to a 30-year fix. So that was at 7.9% of all applications. That is a little bit on the higher side. I believe the two or three-year high is around 12%, just going by memory from about a year ago. And the low point is around 3%. So due to the affordability constraints, we're seeing more people applying for an arm. In my personal opinion, if you are concerned about affordability, don't go to an arm. Just try to stick to a 30-year fix and buy what's reasonable and affordable to you because an arm is just a more risky loan product. All right. So going back to Redfin's report, they also have their home buyer demand index. This is a measure of home services from Redfin agents was down 11% year over year. So 11% fewer home tours and home buying services from Redfin agents and Google searches is up by 20%. Touring activity is up by 3% compared to the start of this year. All right. So let's talk about a lot of other factors here. So let's home prices first. And this is for the forex ended November 23rd and they cover 400 plus U.S. metros and their weekly data goes back to 2015. So when you hear record, that is only through the past 10 years. So in any case, looking at the median sale price, $393,000. I actually just made a video regarding the California market. Our median price in California is just under $900,000, about 890,000 to be exact. So we definitely paid to live in California. So for the nation as a whole, it's 393,000 up by 2.4% year over year, the biggest increase in nearly eight months. Asking prices are up by 2.5%. Your monthly housing payment is actually down 2.1%, the lowest level in a year. And that's due to the fact that we're not seeing home prices surge, but also due to the that this figure has to do with rates. And of course, mortgage rates have been declining, making it more affordable to buy a house. Now, of course, every market's different, right? Let's talk about home price changes for each of the 50 most populous metros. So out of those 50, there's 16 of those that are down year over year regarding their median sale price. And those were Oakland, California, the biggest decline nationwide down by 4.8%. Then we have Jacksonville, Florida, Fort Worth, Texas, Dallas, Texas, and San Francisco. Interesting that Austin, Texas is not in the top five. It was in number one spot for years. In regards to the biggest increase in home prices, that was actually Cincinnati up by nearly 10%, 9.2%. Then we have Cleveland, Detroit, Nassau County, New York. I know I'm probably mispronouncing that. And then we have Pittsburgh, Pennsylvania up by 6.5%. For much of the Midwest and the Northeast, they have a lack of house for sale. And therefore, go figure, those are areas in which home prices have increased the most. All right, so going back here, let's talk about pending home sales, new listings, and active listings. So pending sales posted the biggest decrease in eight months. That is a leading indication of closed home sales, right? So pending home sales, a measure of home buyers getting their offers accepted fell by 2%. So therefore, you would assume if that trend continues, that closed home sales will go down as well. New listings only increased by 2%, which is probably a part of the reason why active listings, which is a total pull of the amount of house for sale, only increased by 5.7%, the smallest increase since February of 2024. So we're seeing here is that active supply or inventory is barely increasing from a year ago. And this is likely due to de-listings and the fact that new supply in the market is at very low levels. So active listings probably is due to the fact we're seeing these stale listings in which homeowners are asking too much for their houses, and that's all contributing to housing supply, not due to the fact we're seeing a huge surplus or huge increase in new listings from 12 months ago. All right, let's also have a look at the 50 most populous metros, how they fare regarding pending sales and new listings. So the biggest increases of pending home sales were West Palm Beach, Florida, up a staggering 17.3%. Wild. Miami up by 14%. Phoenix, 8.1%. That's interesting because I know Phoenix has a big increase of housing supply. Then we have Cleveland and Sacramento, where I live and work as an agent. We're also seeing a big increase here. A lot of the time we're seeing a lot of people moving from more expensive areas that are close by, then moving to Sacramento because they can buy a house and not pay $4,000 per month in rent. They can buy a house for less than that. So anyways, looking at the biggest declines of pending home sales, that was actually San Jose, Seattle, Tampa, Florida, Houston, and San Diego. In regards to new supply in the market, the biggest increase, Minneapolis, Cincinnati, Boston, Virginia Beach, Virginia, and Detroit. In contrast, Tampa, Florida posted the biggest decline. Then we have Riverside, San Antonio, Fort Lauderdale, Florida, and Jacksonville, Florida. Redfin also provided this as well. This is our US median home price up by 2.4% year over year at 393,000. What's actually unusual, what's happening this year compared to years past. Here's 24, here's 2023, and here's 2022. Prices are up greatly overall nationwide compared to 2022. But look what happened then. Prices peaked in June that year and then taint through the rest of the year. This year, they peaked in July. We saw a seasonal decrease. This is actually very abnormal. Starting in October, prices have actually been increasing. Again, this could be due to the fact that we're not seeing enough new supply in the market, which would put more downward pressure on home prices if we were to see a lot more houses being listed for sale. But frankly, we're not seeing that right now. Having said that, here's a look at active listings or inventory levels nationwide. Nearly 1.2 million houses for sale, but we're seeing this seasonal decrease so far this year. What normally happens is that inventory levels tend to peak in the late summer months, and we saw that in 2022. All these other years were really abnormal. I remember making these videos a year ago and seeing that it's very unusual to see inventory peak in October. This year, we saw more a normal trend where inventory increases throughout the year, peaks in late summer, then decreases thereafter. In regards to the month supply, here's something that's very unusual as well, because the month supply in 2023 and 2024 was increasing big time during this timeframe right here, October through November. This year, as well as last year, more recently, the month supply has actually been going down, so actually moving in the opposite direction compared to the past couple of years. We're still at elevated levels though. Having said that, 4.4 months overall, I would say is more balanced housing market compared to what we saw back in, what, January 22 when the month supply was only two months. Check this out as well. This is absolutely wild. Remember 2022, the spring buying season there was absolutely insane. People were rushing to buy houses when rates increased from 3% to 5%, and people were trying to buy houses before rates hit 7%, and they did in October. Because of that, houses were selling way over asking, and this is off the charts here. The spring home buying season, May 22, that ratio was around 103%, so houses selling about 3% over the seller's asking price on average. Whereas right now, I should say during the peak this year, I should say the peak this year was in June, July when that ratio was 99.5%. On average, homes selling about 0.5% points less than the seller's asking price compared to selling way over asking. The crater after that, it's absolutely insane how high it was here, and then end the year lower than any other year over the past couple of years. Right now that ratio is at 98.2%, a little bit lower compared to 2022, but we're not seeing this giant uptick and crash, a huge correction like we saw in 22, which caused home prices to be in negative territory nationwide in the late 22 and early 23. With that said, if you guys want real estate agent referral, check out my website, realestateteamfinder.com. Have an amazing day. I appreciate you so much, and we'll see you in the next video. 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