Early data shows that existing-home sales were up in February and that relistings are experiencing a surge, signaling consumer confidence in the market.
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Despite recent global and economic volatility, the spring market is showing signs of positive momentum, potentially pointing towards a busier year for agents compared to recent years, according to new reports.
Existing-home sales increased 1.8 percent year over year in February to 239,910 homes sold, according to preliminary data from Zillow. New pending listings also increased 3.5 percent year over year and 11.1 percent month over month.
Meanwhile, active inventory saw a 5 percent boost annually, which was likewise up 0.4 percent from January. New listings were down 3 percent year over year, but up 4.9 percent from January.
The latest preliminary data from February, in addition to bringing agents hope for a busier spring market, also reaffirms some economists’ suggestions that the slower market in January was in part due to extreme winter weather experienced across large parts of the U.S.
The hope of lower mortgage rates — as long as it is not derailed by the conflict in Iran — also could help supercharge the spring market.
“Zillow’s latest data suggests buyers and sellers are starting to regain confidence,” Mischa Fisher, chief economist at Zillow, said in the company’s report. “Existing home sales rose from a year ago, providing an early glimmer of hope that the housing market has turned a corner after three years bouncing along the bottom. Buyers have more homes within reach to choose from to go along with these friendlier conditions. Lower mortgage rates will also encourage more homeowners who have felt locked in to sell as they will be better able to afford their next home.”
Positive data from Redfin about a growing number of relistings could also help drive spring homebuying activity this year.
A record 45,000 homes in the U.S. that were delisted last year went back on the market in January, which marks the highest January relistings since at least 2016, Redfin reported. Those relistings represented 3.6 percent of all homes on the market in January.
For this report, Redfin analyzed MLS data and defined a relisting as a property that goes on the market after being off the market for at least 31 days during the last 12 months.
Delistings rose last year as the market shifted to favor buyers. As buyers stepped back in response to high homeownership costs and economic uncertainty, sellers far outnumbered buyers, and buyers gained the upper hand in the market.
As a result, many homes lingered on the market while some sellers were less willing to negotiate. Eventually some of those sellers opted to delist their home instead of cutting the price, to see if the market might move in their favor in later months. In December, delistings hit a record high of 112,788.
“Many sellers who pulled their homes off the market last year are relisting now in hopes of capitalizing on spring homebuying season,” Andrew Vallejo, an Austin-based Redfin Premier agent, said in the company’s report. “I’m working with one couple who plans to relist their current home as soon as they close the deal on the house they’re in the process of buying. Their house was on the market last year, but they didn’t have an incentive to lower the price enough to attract buyers because they hadn’t yet found their dream home.”
Relatively low mortgage rates this year may have some sellers thinking that they can get away with asking for a bit more for their listing. However, buyers will have more options to choose from in the market now, especially with relistings trending, so sellers should avoid getting greedy, Redfin said.
“Homebuyers are already scoring discounts because there are more homes for sale than people who want to buy them, and it’s possible those discounts will get bigger if relistings boost supply further,” Redfin Senior Economist Asad Khan said in Redfin’s report. “Some sellers will be more flexible on price when they relist since they’ve already been burned once. Buyers shouldn’t be shy about asking for concessions; even if the list price is high on paper, the seller may be open to negotiating.”
Email Lillian Dickerson
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