Pending home sales in the United States dropped 3.4% year over year during the four weeks ending May 11, marking the lowest level for this time of year since 2020, according to a new report from Redfin. The dip reflects mounting concerns among prospective buyers over elevated mortgage rates, rising home prices, and broader economic jitters.
The median monthly housing payment reached $2,860, just $6 below the all-time high set the previous week, while the median sale price rose 1.8% to $390,998. Redfin agents in markets like Texas, Ohio, North Carolina, and Oregon observed a notable drop-off in buyer enthusiasm, attributing it to fears about job stability, inflation, and ongoing trade and recession risks.
Despite slower buyer activity, the housing inventory grew. New listings increased 5.1% year over year, and total active listings climbed 14.3%, although this represents the smallest annual gain in over a year. In response to waning demand, nearly half of sellers offered concessions, such as mortgage-rate buydowns or assistance with closing costs, to attract buyers.
Mortgage activity showed mixed signs: purchase applications rose 2% week over week and 18% compared to a year ago, while the average 30-year fixed mortgage rate held steady at 6.76%. Touring activity rose 41% from the start of the year, but demand remained uneven across regions. In cities like Miami and Las Vegas, pending sales plummeted by 19% and 13.6%, respectively.
Redfin analysts point to a combination of persistent affordability pressures and a cautious economic outlook as key reasons behind the cooling market. Despite higher inventory levels, many homes continue to sit unsold, giving buyers more negotiating leverage heading into the summer season.
