According to Redfin News, pending home sales across the country dipped about two percent during the four weeks ending July 12, marking the first decline we've seen in a month. It's the kind of pullback that tells us buyers are getting more cautious about jumping into the market right now.
The main culprits seem to be the usual suspects we've been watching. Mortgage rates ticked back up to around 6.49 percent after a brief dip the week before, and we're seeing daily rates hit levels we haven't touched in nearly a year. Combined with median home prices sitting just shy of all-time highs, affordability is becoming a real barrier for many buyers trying to get into homes. On top of that, there's been some global economic uncertainty that's been making people hesitant about making big financial moves.
What's happening on the seller side is equally interesting. New listings fell slightly and hit their lowest point since the beginning of the year. The report notes that many homeowners are choosing to stay put rather than list their homes in an environment where buyer interest is softer. Redfin's data shows that while there are still substantially more sellers than buyers overall, fresh inventory is tightening up.
A real estate agent quoted in the reporting from Michigan described how first-time buyers especially are struggling right now. Even homes listed below $350,000 are stretching the budgets of many qualified buyers, and those affordable properties are hard to find and highly competitive when they do appear. She noted that many move-up buyers are sidelining themselves too, either because they're locked into great mortgage rates they don't want to leave or because they can't find new homes that meet their needs.
What I am seeing locally here in the Bay Area tracks with what's happening nationally. Our market remains tight, but that combination of high rates and prices near historic peaks is definitely making first-time buyers and move-up buyers think twice before making an offer. The inventory situation we're watching suggests that some sellers are in a holding pattern, which could mean fewer choices for buyers in the coming weeks.
