New Listings Rise With Lower Mortgage Rates

The share of single-family rentals in overall rented properties have fallen to a ‘record low,’ according to a real estate report.

A for-sale sign outside a home in Irvine, Calif., on Sept. 21, 2020. John Fredricks/The Epoch Times

The number of homes newly listed for sale rose by roughly 1 percent for the four weeks ending Jan. 25 from a year ago, the first such increase in more than two months, real estate brokerage Redfin said in a statement on Jan. 29.

The brokerage attributed the jump to two factors, the first being an improvement in homebuying demand.

“Mortgage-purchase applications are sitting near their highest level in three years. Some house hunters are coming out of the woodwork because housing costs are declining—the median monthly housing payment is down 6.6 percent from a year ago—and sellers are taking notice of the uptick in demand,” according to the statement.

The second factor is lower mortgage rates. The average weekly mortgage rate on a 30-year fixed-rate mortgage for the week ending Jan. 29 was 6.10 percent, according to data from Freddie Mac.

While this was slightly up from 6.06 percent in mid-January, the current rate is almost a percentage point lower than the 7.04 percent rate from a year ago.

The 6.06 percent rate in mid-January was the lowest mortgage rate level since September 2022.

Connie Durnal, a Redfin Premier agent, said buyers were now “more serious” when looking to purchase homes than they were a few months earlier. As such, they’re looking at “every listing,” comparing the pros and cons of each property.

“Buyers are able to take their time and be picky because there are a lot of listings; bidding wars are few and far between. Sellers who need to move know they need to be realistic; some are willing to negotiate prices down and make concessions like repairs, especially because they’re competing with builders of new construction,” Durnal said.

For mortgage rates to reduce further, the Federal Reserve’s benchmark interest rates may have to decline even more.

Last year, the central bank lowered interest rates three times. At its first policy meeting of the year, held on Jan. 27–28, the Fed decided to keep interest rates unchanged in the 3.5–3.75 percent range.

On Jan. 30, President Donald Trump announced that former Federal Reserve Governor Kevin Warsh is his nominee for the next head of the U.S. central bank.

“I am pleased to announce that I am nominating Kevin Warsh to be the CHAIRMAN OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM,” Trump wrote in a Jan. 30 post on Truth Social.

Trump has criticized current Fed Chair Jerome Powell for not lowering interest rates enough and suggested that rates should be 2 to 3 percent lower.

Rental Market

In the rental market, single-family rentals are in decline, Redfin said in a statement on Jan. 29.

According to the brokerage, 31 percent of rentals are in single-family homes, a “record low.” Meanwhile, 33.1 percent of rentals are located in large multifamily buildings, which it said was the “highest share in records dating back to 2011.”

Large multifamily buildings became the most common type of rental housing in 2022, surpassing single-family homes at a time when multifamily construction was surging amid the “pandemic moving frenzy,” according to the company.

“Big apartment buildings make up a growing piece of the rental-market pie because America has been building a lot of them, which has made them more affordable for renters,” Redfin senior economist Asad Khan said.

“Increased supply gives renters more options and more room to negotiate prices. While multifamily construction has slowed recently, there are still more apartments for rent than people who want to rent them, which has kept rent growth at bay.”

As for what lies ahead for the rental market this year, Zillow expects rent growth to ease, according to a report released on Jan. 20.

Single-family rents are projected to moderate further this year, while multifamily rents remain essentially flat amid a steady supply of new apartments.

“Together, these trends indicate a rental market that is expected to continue cooling from recent highs and shift toward a more balanced pace of growth,” the report said.