\n(NASDAQ: RDFN) \u2014 Home tours and pending sales are falling as devastating wildfires burn in Southern California, extreme cold and snow hit the Northeast, Midwest and South, and housing costs rise across the country. That\u2019s according to a new report<\/a> from Redfin (redfin.com<\/a>), the technology-powered real estate brokerage.<\/p>\n
\nRedfin\u2019s Homebuyer Demand Index\u2014a seasonally adjusted measure of tours and requests for other buying services from Redfin agents\u2014is down 11% month over month to its lowest level since August. Pending home sales fell 8.4% year over year during the four weeks ending January 12, the biggest decline since October 2023. Prospective sellers are also sitting on the sidelines, with new listings posting their biggest annual decline since September 2023.<\/p>\n
\nBut there are some pieces of encouraging news for homebuyers and the housing market. Mortgage rates are falling<\/a> after the latest CPI report showed softer-than-expected core inflation, perhaps bringing some relief to hopeful buyers. And mortgage-purchase applications jumped this week to their highest level in nearly a year, signaling that pending sales may improve in the weeks to come. It\u2019s also worth noting that it\u2019s too early in the new year to determine how 2025\u2019s housing market will shape up.<\/p>\n \nFor now, high housing costs are one reason pending sales are declining. Many would-be buyers are priced out, with the median housing payment nationwide sitting at its highest level in over two months. Home sale prices are up 5.8% year over year, and daily average mortgage rates hit their highest level since May this week after a surprisingly strong<\/a> jobs report before the CPI report reversed the course of rates.<\/p>\n Los Angeles wildfires push down sales, listings, but agents report people displaced from homes are scrambling to find housing<\/b><\/p>\n \nThe wildfires are simultaneously pushing down homebuying demand and listings in the Los Angeles metro, and driving up buying and rental demand from the pocket of people who have been displaced from their homes. During the four weeks ending January 12, Los Angeles pending sales fell 4% year over year and new listings fell 2.5%. Redfin Economic Research Lead Chen Zhao said sales and listings in Los Angeles would have posted smaller declines if not for the fires and that Redfin will likely see bigger declines in the coming weeks.<\/p>\n \nBut local real estate agents are reporting a surge in demand\u2014especially for rentals\u2014from people who have been directly impacted by wildfire damage. Many of the thousands of Los Angeles residents who have lost their homes are competing for rentals and listings in the area.<\/p>\n \n\u201cThere\u2019s a feeling of overwhelming sadness and stress about the destruction we\u2019re seeing in so many neighborhoods,\u201d said Susan Brown<\/a>, a Redfin Premier<\/a> agent in the Los Angeles area. \u201cPart of that is because so many people now have to find new homes, and we\u2019re seeing a chaotic ripple effect in the market. I\u2019ve personally had three people who lost their homes reach out to me to start searching, and we all have an influx of clients looking for rental properties. Many Redfin agents are pivoting to helping people find rentals as soon as possible. Because rentals are going so fast, my advice for people searching for housing is to directly reach out to a real estate agent for help.\u201d<\/p>\n Cold, snow slowing housing market in the Northeast, Midwest<\/b><\/p>\n \nIn much of the rest of the country, frigid temperatures and snow are keeping house hunters at home, and delaying homeowners from listing.<\/p>\n \nFor Redfin economists\u2019 takes on the housing market, please visit Redfin\u2019s \u201cFrom Our Economists<\/a>\u201d page.<\/p>\n Leading indicators<\/b><\/p>\n
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