New year housing market sluggish compared to 2013

by Ryan Smith14 Feb 2014
The usual post-holiday boost in homebuyer demand was somewhat muted this year, according to data released Thursday.

Internet real estate agency Redfin reported Thursday that the number of customers making offers on homes in December-January increased 28.7% from the prior five weeks. That’s down from last year, when the same period saw a spike of 42.6%.

The number of customers touring homes, meanwhile, stayed relatively stable from the previous year, jumping 53.8% compared to 50.9% for the same period last year.

“The stability of touring suggests that people are still interested in buying, but fewer of them are finding homes they want to make offers on, or perhaps more importantly, that they can afford,” Redfin said in a statement.
Both tours and offers surged at the beginning of last year as customers took advantage of low mortgage rates, Redfin reported. But homes are much less affordable this year, with mortgage rates up about a percentage point and home prices 14.3% higher than at the beginning of 2013.

“For someone who purchased a $350,000 home in January 2013 at a 30-year fixed rate of 3.41 percent, her monthly mortgage payment would have been $1,554,” Redfin reported. “However, that very same home now costs $400,050. At the current mortgage rate of 4.43 percent, her monthly mortgage payment is now $2,010, a 29 percent jump from a year ago.”

“The housing market feels stuck,” said Denver Redfin agent Paul Stone. “Homebuyers are discouraged by the limited options, so fewer are making offers on homes. But sellers are frustrated buyers, too. Sellers don’t want to put their home on the market until they’re confident there will be something in their price range to move up to.”




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