Residential Real Estate News
U.S. Homes Are Selling at Slowest Pace in 5 Years in Early 2025
According to Redfin, U.S. homes are selling at the slowest pace since the pandemic's onset in early 2020, as high mortgage rates and elevated home prices persist.
Key insights from Redfin data for the four weeks ending January 26, 2025:
- Longer time on the market: Homes under contract spent an average of 54 days on the market, the longest since March 2020, and a week longer than a year ago. In January 2022, homes typically sold in just 35 days during the homebuying boom.
- Increased supply: The market had a 5.2-month supply of homes, the highest since February 2019, up from 4.9 months last year--a sign of a buyer's market.
- Declining sales: Pending home sales dropped 9.4% year-over-year, marking the largest decline since September 2023.
The slowdown stems from high home buying costs, with mortgage rates near 7% and home prices up 4.8% year-over-year. The median monthly payment now stands at $2,753, close to the April record. Extreme weather, including winter storms in the Midwest and wildfires in Southern California, has also discouraged potential buyers.
Redfin agents, however, anticipate a rebound as mortgage rates ease and new listings rise. Jordan Hammond, a Redfin Premier agent in Raleigh, N.C., noted a shift in buyer sentiment.
"Buyers have been hesitant, thinking prices and rates might drop. But now it's clear that sellers aren't slashing prices, and rates aren't plummeting. People are starting to realize that if they want or need to move -- and can afford it -- they should go for it."
