SEATTLE, WA — A modest uptick in homebuyer activity has marked the start of the new year, according to a report from Redfin. The company’s Homebuyer Demand Index, a seasonally adjusted measure of buyer interest based on agent activity, rose 2% in the week ending January 5, both month over month and year over year.
Several factors are contributing to the slight increase in demand. Some buyers are adjusting to current mortgage rates, which recently hit a seven-month high, while others are entering the market following the holiday season. Additionally, higher inventory levels compared to recent years are appealing to buyers who previously faced limited options.
Emily Lam, a Redfin Premier agent in Seattle, observed heightened competition in her market. “Three of the four offers my clients have made in the last week have competed against other offers with competitive terms, like waiving all contingencies and releasing earnest money early,” Lam said. “Some buyers are getting serious about their search because they’ve come to terms with 7% rates and they’re worried that if they wait longer, home prices will just keep rising. Others are starting their search in hopes that rates will decline soon. Either way, I’m advising buyers to get serious now because desirable listings will get more competitive as the year goes on.”
Nationwide, however, increased interest hasn’t yet translated into more completed transactions. Pending home sales declined 3.1% year over year in the four weeks ending January 5. The dip might appear larger due to comparisons with the same period last year when falling mortgage rates briefly spurred demand.
Meanwhile, sellers remain cautious, with new listings down 2.5%, marking the largest drop in more than a year. Similar to sales, this decline may also look artificially exaggerated given last year’s temporary surge in activity.
For now, Redfin plans to closely monitor whether rising buyer interest will eventually convert into higher sales or prompt more sellers to enter the market as 2025 progresses. Signs of sustained momentum could signal a more dynamic housing market in the months ahead.
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