A short-lived dip in mortgage rates pushed pending contracts to a near four-year high, but overall spring activity remains slower than in past years.
Source: Original report
U.S. pending home sales rose to their strongest point since September 2022 during the four weeks ending May 3, increasing 7.7% year over year on a seasonally adjusted basis. The uptick reflects a brief window of lower borrowing costs that encouraged some buyers to act.
Why more buyers returned
Several factors combined to bring buyers off the sidelines:
- Short-term drop in mortgage rates: Nationwide mortgage rates fell to about 6.23% last week after reaching a six-month peak roughly two weeks earlier. That slide trimmed the median U.S. housing payment by roughly 2.2% from a year earlier, temporarily improving affordability. (Daily average rates did spike as high as 6.56% this week amid renewed fighting and uncertainty in Iran.)
- Rising inventory: The number of homes for sale increased by roughly 1% from a year earlier, pushing listings to levels near the highest seen in about five years. More choices tend to translate into more transactions.
- Late-arriving spring buying season: The seasonal surge in listings and buyer activity appears to be starting later than usual, which likely contributed to the recent jump in seasonally adjusted pending sales.
Market still cooler than past springs
Despite the recent gains, competition remains muted compared with previous spring seasons. The typical home now goes under contract in about 43 days, three days slower than a year ago. Just 26.4% of homes that go under contract are selling above their asking price—the smallest share for this time of year in at least five years.
Redfin agents report that bidding wars are mostly limited to homes that are properly priced and recently updated. Properties needing repairs or priced well above a metro's most active range are taking longer to sell.
Data scope and local variation
Redfin's national metrics draw on listings and sales across more than 900 U.S. metro areas, with weekly housing-market data extending back to 2021. Metro-level results can vary: for example, Jacksonville showed a decline in pending sales versus the prior year.
Short-term shifts in rates can spur bursts of buyer activity, but broader market indicators suggest the housing market remains cooler and less competitive than typical springs.
For additional analysis from Redfin's economists and local trends, visit Redfin's economist coverage.
