U.S. pending home sales rose 1% month over month in October to the highest level in a year on a seasonally adjusted basis. They fell 4.8% from a year earlier, but that’s the smallest annual decline in almost two years.
Pending sales have been ticking up for several reasons:
“I’ve had a lot of sellers reach out to me recently saying they’re ready to list their homes—a reversal from recent months,” said Heather Mahmood-Corley, a Redfin Premier real estate agent in Phoenix. “Everyone has a different reason for relocating. One of my sellers is moving because she wants to buy her father’s house and he’s giving her a deal, which helps offset the higher mortgage rate she’ll take on. Another is moving to Florida with her sister because her husband passed away; she built up a lot of equity, so is able to pay in cash. Other people are selling because they want to live somewhere more affordable.”
Note: Data is subject to revision
While pending sales have inched up in recent months, closed home sales have continued declining. In October, closed sales fell 1.8% from a month earlier and 12.5% from a year earlier, hitting the lowest level since the onset of the pandemic on a seasonally adjusted basis. That’s partly because many deals are falling through at the last minute.
Roughly 54,000 U.S. home-purchase agreements were canceled in October, equal to 17.2% of homes that went under contract that month—the highest percentage in Redfin records that date back to 2017. That’s up from 16.1% one month earlier and 16.6% one year earlier.
Please note that homes that fell out of contract during a given month didn’t necessarily go under contract the same month. For example, a home that fell out of contract in October could have gone under contract in September.
“I’m seeing a lot of cold feet,” said Redfin Tampa Sales Manager Eric Auciello. “Home prices are high, mortgage rates are high and insurance costs are high, and when buyers see the final number, a lot of them are backing out.”
Some buyers are also walking away when sellers refuse to fix issues that come up during the inspection, according to Mahmood-Corley.
“Buyers want turnkey houses because everything is so expensive now, whereas in 2021 and 2022, they felt lucky to get any house,” she said. “And while I’m seeing more sellers in the market, they’re squirrely too. They’re backing out when they don’t get the price they want.”
The cancellation rate could tick down in November as buyers take advantage of the decline in mortgage rates. The average 30-year-fixed mortgage rate fell to 7.44% this week, the lowest level since September.
Scroll to the bottom of this report to find the deal cancellation rate for the 50 most populous U.S. metropolitan areas, along with other local insights.
The median U.S. home sale price rose 3.5% year over year to $413,874 in October and was up slightly (0.5%) from a month earlier.
Prices were just 4.4% below their May 2022 record high of $432,732, in part because buyers are still competing for a limited number of homes, which is buoying prices; while listings have inched up in recent months, they remain historically low.
Data in the bullets below came from a list of the 91 U.S. metro areas with populations of at least 750,000. Select metros may be excluded from time to time to ensure data accuracy. A full metro-level data table can be found in the “download” tab of the dashboard embedded below or in the monthly section of the Redfin Data Center. Refer to our metrics definition page for explanations of metrics used in this report. Metro-level data is not seasonally adjusted.
Note: Sales and listings posted large year-over-year gains in coastal Florida metros including North Port and Cape Coral in part because Hurricane Ian slowed housing market activity in the fall of 2022.
Data below came from a list of the 50 most populous metro areas. Please note that homes that fell out of contract during a given month didn’t necessarily go under contract the same month. For example, a home that fell out of contract in September could have gone under contract in August.
