Pending home sales in the United States have seen a notable decline during the four weeks that ended on March 2, signaling ongoing economic uncertainty and elevated property prices, according to recent insights from Redfin. The data reveals that pending sales dropped by 6.4% compared to the same period last year, marking the second-largest decrease since November 2023.
This decline stems from various concerns including slower economic growth, rising layoffs, and the repercussions of tariffs, which have all contributed to potential buyers remaining cautious. Furthermore, the White House has announced temporary tariff exemptions for goods from Canada and Mexico that align with North American trade agreements, a decision that could influence market dynamics.
On the contrary, the U.S. administration has recently doubled its tariffs on imports from China, which has prompted both Canada and China to declare retaliatory measures. February 2023 also witnessed the highest number of job cuts in a single month since July 2020, predominantly driven by reductions in government employment, as reported by Challenger Gray & Christmas.
This backdrop of economic volatility underscores the challenges faced by potential homebuyers. In terms of pricing, the median sale price during this four-week period has experienced a 3.2% increase year-over-year, now standing at $379,350. Moreover, mortgage payments have risen by 5.3%, reaching $2,772, just $26 shy of the all-time high.
This increment signals the continuing pressure on buyers despite a decline in mortgage rates, which might be enticing some buyers back into the market. According to Redfin, the fixed-rate mortgage for a 30-year term has decreased to 6.76%, the lowest rate observed in nearly three months, which could further stimulate interest from homebuyers.
These shifts in mortgage rates have reflected positively in recent data, with a 9% increase in mortgage purchase applications captured by the Mortgage Bankers Association in the past week. Despite the overall decline, some markets have shown resilience. Out of the 50 most populous U.S. metropolitan areas tracked by Redfin, six have reported annual increases in pending home sales over the same four-week span, notably with four of these areas located in California.
Los Angeles, in particular, reported a significant rise in sales, increasing by 8.5%. Such trends indicate that while the broader market may be facing challenges, certain regions continue to thrive..