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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 58 April 2024 J O U R N A L UNLOCKING THE 'LOCK-IN EFFECT' N ew listings increased 3.8% month over month in February, reaching their highest level since September 2022, according to Red- fin research. New listings rose 14.8% year over year, the highest annual increase since May 2021. Active listings, or the overall availabil- ity of properties for sale, reached their highest level in more than a year. On a seasonally adjusted basis, they increased by 0.8% from the previous month and decreased by 0.1% from the previous year, the smallest yearly loss in months. Texas had the largest increase in new listings over the previous year, while Florida had the highest increase in active listings—the two states with the most housing construction. In particular, condo listings in Florida are contributing to the increase in supply as HOA and insurance prices rise. "The housing market is nothing like it was two years ago during the pandemic homebuying frenzy, but it's better than it was last year. It's coming back," said Da- vid Palmer, a Redfin Premier real estate agent in Seattle. "Sellers who were on the fence in 2023 are now listing. They're more used to elevated rates now. There still aren't enough listings to quench pent-up buyer demand, but it's getting better." Housing supply is increasing across the United States as the "lock-in effect" continues to fade. Eventually, homeown- ers who have been holding on to their ultra-low mortgage rates will be forced to leave. "February was a mixed bag for the housing market and the economy," said Chen Zhao, Redfin Economics Research Lead. "Housing supply is finally starting to recover in a meaningful way, which is great news for buyers who for months have been competing for a tiny pool of homes for sale. Still, many house hunters are hesitant to pull the trigger because mortgage rates and home prices remain elevated." Mortgage-purchase applications fell in February as mortgage rates rose after decreasing in December. The average 30-year fixed mortgage rate rose to 6.78% last month from 6.64% in January. Mort- gage rates are likely to remain up for a little longer than expected, following this week's hotter-than-expected inflation data. In addition, home sales rose 0.5% month over month on a seasonally adjusted basis in February but declined 3.5% year over year. Metro-Level Highlights: February 2024 » New listings: New listings rose most from a year earlier in Austin, Texas (44.6%); Dallas (38.1%); and Charles- ton, South Carolina (36.8%). They fell in two metros—Albany, New York (-2.9%) and Buffalo, New York (-0.7%)—and were flat in Fresno, California (0%). » Active listings (total supply): Active listings increased fastest in Cape Cor- al, Florida (60.6%); North Port, Florida (52.5%); and Fort Lauderdale, Florida (25.5%). They decreased fastest in Raleigh, North Carolina (-24.4%); New Brunswick, New Jersey (-19%); and Nassau County, New York (-18.5%). » Median Sale Price: Median sale prices rose most from a year earlier in Newark, New Jersey (16.5%); Anaheim, California (15.8%); and Grand Rapids, Michigan (15.8%). They fell in three metros: San Antonio (-4.2%); Mem- phis, Tennesse (-3.5%); and North Port (-2.2%). » Closed home sales: Closed sales rose most in San Jose, California (24.9%); San Francisco (21.1%); and Dayton, Ohio (15.1%). They fell most in Freder- ick, Marlyland (-14.8%); New Orleans (-14.2%); and Tulsa, Oklahoma (-14%). » Sold above list price: In San Jose, 65.3% of homes sold above their final list price, the highest share among the metros Redfin analyzed. Next came Rochester, New York (62.8%) and Oak- land, California (62.3%). The shares were lowest in North Port (6.6%), Cape Coral (8.3%), and West Palm Beach, Florida (8.7%). » Off market in two weeks: In Seat- tle, 77.4% of homes that went under contract did so within two weeks—the highest share among the metros Redfin analyzed. Next came Roches- ter (75%) and San Jose (70.9%). The lowest shares were in Honolulu (8.4%); Greensboro, North Carolina (19%); and McAllen, Texas (20.8%). » Days on market: The typical home that went under contract in Seattle did so in 11 days, making the fastest market among those Redfin analyzed. Next came Rochester (12) and San Jose (12). The slowest markets were New Orle- ans (97), Austin (82), and Honolulu (77). Home Prices Post Largest Increase in Nearly a Year and a Half The median U.S. home sale price increased 6.6% year over year—the larg- est increase since September 2022—to approximately $412,778. Prices have continued to grow because, despite the recent increase in listings, there is still insufficient supply to match demand. Both new and active list- ings remained well below pre-pandemic levels in February. "If you price your home reasonably, buyers will show up. If you don't, buyers will wait for you to drop the price," Palm- er said. "I recently listed an estate sale fix- er-upper for $550,000 and it got 14 offers, sold for $75,000 over the asking price and the buyer waived every contingency." In Seattle, 77.4% of homes that went under contract did so within two weeks—the highest share among the metros Redfin analyzed. It took the top spot from Rochester, which has held that title for months. The typical home that went under contract in Seattle did so in 11 days (versus a national median of 48 days).