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Home Tours Up, Sales Lag as Mortgage Rates Hit 7-Month High

Home tours have picked up slightly in the new year, with Redfin’s Homebuyer Demand Index rising 2% from last month and the same time the previous year. Some buyers are becoming more competitive, waiving contingencies and acting quickly on desirable homes. However, the rise in interest coincides with a seven-month high in 30-year fixed mortgage rates, which reached 7.17% on January 8, limiting pending home sales. Sales dropped 3.1% compared to last year, partly due to unusually high demand in early 2024 following a dip in mortgage rates.

On the supply side, new listings fell 2.5% year-over-year, the most significant drop in over a year, though active listings rose 10.6% as homes linger on the market. Median sale prices increased 5.5% to $379,988, reflecting higher buyer competition for desirable properties. Redfin agents note that some buyers are adjusting to high rates and starting their searches early, while others hope rates will decline soon, making the market more competitive as the year progresses.

Jobs Report Drives Treasury Yields Toward 5%

U.S. Treasury yields have been rising after a December jobs report showed employers added 256,000 jobs, far more than expected, and unemployment decreased. This strong job growth has led to expectations that the Federal Reserve will keep interest rates higher for longer to control inflation.

The news has raised concerns about inflation staying above target and even the possibility of another rate hike. Many in the bond market now believe that 10-year Treasury yields could reach 5% this year, which could impact the broader economy and financial markets.

Supreme Court Rejects NAR Appeal on DOJ Investigation

The legal battle between the National Association of Realtors (NAR) and the Department of Justice (DOJ) is nearing its end. The Supreme Court recently declined to hear NAR’s appeal against a 2024 ruling by the U.S. Court of Appeals, which allowed the DOJ to continue its investigation into NAR’s policies. This decision means the appeals court’s ruling will stand. The conflict started in 2018 when the DOJ investigated NAR’s rules, which led to an initial settlement in 2020. However, under the Biden administration, the DOJ withdrew the settlement in 2021, claiming it prevented further investigation into potentially harmful practices.

NAR filed petitions to challenge the DOJ’s ability to reopen the investigation, arguing it violated the 2020 settlement. While a district court sided with NAR in 2023, the appeals court reversed this decision in April 2024. NAR then sought the Supreme Court’s intervention, but the Court denied the petition. Despite this setback, NAR remains committed to defending its interests and those of its members.