Pending home sales are declining in Tacoma, nationwide. Will house prices follow?
Rising interest rates and the usual fall slowdown once seen in pre-pandemic times are combining for a steep decline in home sales nationwide.
Redfin on Oct. 27 noted that pending home sales in October declined to their lowest since 2015. The report said, “U.S. pending home sales fell 35 percent year over year during the four weeks ending October 23..”
It noted the drop “represents the largest annual decline and the fewest homes under contract in any October since at least 2015, when Redfin’s weekly housing market records began.”
For the Tacoma metro area, pending sales in the same four-week period dropped 49.5 percent compared with 2021, according to data from the real estate firm.
Redfin deputy chief economist Taylor Marr said in the report that “both mortgage purchase applications and pending sales are below 2018 levels. A four-year setback is a serious correction.”
Marr added, “With mortgage rates still elevated, we are in for further sales declines, but those should eventually bring price relief to those who need to move this winter.”
That would be good news for buyers in the Puget Sound region, who’ve seen some of the steepest price increases over the past five years.
Redfin also shows that in the four-week period ending Oct. 23, 42 percent of homes for sale in Pierce County were off the market in two weeks, a 23.7 percent decline from the same period in 2021.
Market reports on area counties from J. Lennox Scott, CEO of John L. Scott Real Estate, in September described the slowdown as “a major intensity adjustment” for the local housing market.
In his NWMLS statement last month, Scott said, “We can’t compare today’s housing market to the low mortgage rates of the COVID housing stimulus (‘20, ‘21, and spring of ‘22). Pre-pandemic data provides a more realistic comparison to the current housing market. In September, we experienced the same number of new listings as we did pre-pandemic, but with less intensity and a lower percentage of homes going under contract.”
Northwest Multiple Listing Service’s report is due next week.
Average 30-year mortgage rates have pushed past 7 percent as of Oct. 31.
This story was originally published November 1, 2022 at 5:00 AM.
