Pending home sales fall as mortgage rates tick up: report

Pending home sales fell nearly 8% in the past four weeks compared to the same period last year as mortgage rates rose slightly and severe winter weather delayed home purchases, according to a new report from Redfin. did.

The decline in pending sales was the largest decline since October, according to Redfin. This comes as interest rates on 30-year fixed mortgages, which have fallen in recent months, are rising again towards an average daily rate of 7%.

Mortgage rates, which have been rising along with interest rates for the past two years, reached a 20-year high of 8% in late October and have since begun to fall. However, Redfin noted that last Friday, the average daily mortgage rate posted the largest single-day increase on record.

“We’re seeing some recovery, with people looking for homes touring homes, but even in the early stages of demand, it hasn’t risen as much as we would expect for this time of year,” said Chen Zhao, head of economic research at Redfin. said Chen Zhao, head of economic research at Redfin. statement.

“That’s because mortgage rates are rising again and winter weather is more severe than usual in many parts of the country, keeping some home hunters at home,” she added.

The Redfin report comes after Federal Reserve Chairman Jerome Powell said the central bank is unlikely to start cutting interest rates in March. “It will probably remain elevated around current levels,” he said.

Interest rates are currently at a 20-year high of 5.25% to 5.5%, as the Federal Reserve has repeatedly raised interest rates in an effort to curb inflation. The central bank has kept interest rates unchanged for the past four consecutive meetings, suggesting its rate hike campaign may be over and encouraging optimism about the possibility of rate cuts.

But Powell warned last week that the Fed needs to see “better data” before starting to cut rates.

“We want to see better data. We’re not looking for better data,” he said, adding, “We want to see better data. We need to see more evidence,” he added.