Pending Home Sales Surge to 3-Year High, FL Lags Amid Storms

Pending home sales recorded their biggest YoY gain in three years, up 2% for the four-week period ending October 6, according to a Redfin report. 

According to the Real Deal, the Federal Reserve’s recent interest rate cut was a key factor, lowering typical housing payments to $2,526 a month, near the lowest levels of 2024. This helped bring buyers back into the market, particularly in major metro areas.

Leading The Way

The growth in pending sales was led by Phoenix, which enjoyed a 14.1% YoY increase in pending home sales. 

However, the Redfin report warned that the momentum in pending sales could slow down in the coming weeks as mortgage rates start to rise again. 

The daily average mortgage rate increased to 6.62% earlier this week, up from 6.26% the previous Thursday, following a strong jobs report.

Florida Faces Challenges

While many metros saw rising pending home sales, Florida was an exception. The state’s real estate market has been battered by recent hurricanes and soaring insurance costs. 

The four biggest declines in pending sales occurred in Florida’s metro areas, as the impact of Hurricane Milton and Hurricane Helene, along with climate change-related costs, caused some potential buyers to reconsider moving to the state. 

A Redfin survey found that one in three young adults expressed hesitation about relocating to Florida due to these issues.

Prices Going Up

In addition to rising sales, the median asking price for homes saw its largest annual jump in two years, rising by 5.7% to nearly $400K. Active listings were also up 18% during the four-week period, although this represents the smallest annual gain in six months. 

In other words, while buyers are returning, the market may continue to face stiff competition and persistently high rates as the year progresses.