Mark your calendars for the ultimate real estate experiences with Inman’s upcoming events! Dive into the future at Connect Miami, immerse in luxury at Luxury Connect, and converge with industry leaders at Inman Connect Las Vegas. Discover more and join the industry’s best at

A sudden bump in interest rates and bitter winter weather has sent homebuyers back to the sidelines, according to a new Redfin report published on Thursday.

Chen Zhao | Credit: Redfin

“We’re seeing a bit of recovery with house hunters touring homes, but even demand at the earliest stages isn’t up as much as we would expect at this time of year,” Redfin economic search lead Chen Zhao said in a prepared statement on Thursday. “That’s because mortgage rates are climbing again and winter weather has been harsher than usual in much of the country, keeping some house hunters at home.”

While a large swath of homesellers and homebuyers have come to accept higher mortgage rates, a record one-day rise in daily average rates sent a chill up consumers’ spines.

On Feb. 2, an unexpectedly strong jobs report jolted rates to 6.96 percent — a 180 from Feb. 1 and Jan. 31, when rates experienced the biggest drop in more than a month.

The boost in rates pushed the typical mortgage payment $100 shy of October’s all-time high of $2,739. Heightened borrowing costs matched with a 5.4 percent annual increase in median sales prices have led pending sales to experience their biggest decrease (8 percent) since October.

Of the 50 most-populous metropolitan statistical areas Redfin tracks, only five markets saw pending sales rise in January: San Jose (+13.8 percent), San Francisco (+6 percent), Anaheim (+4.5 percent), Riverside, California (+0.4 percent) and Columbus (+0.2 percent).

Still, Zhao is hopeful about the quickly approaching spring homebuying season. The economic search lead said Redfin’s Homebuyer Demand Index — a seasonally adjusted measure of requests for tours and other buying services from Redfin agents — has been on the rise since mid-January.

Home tours have been on the rebound, too, improving six percentage points from last January (16 percent) as homesellers boost new listings 7 percent year-over-year.

“High mortgage rates brought the local market to a near-standstill from August through November, activity picked up when rates dropped a bit in mid-December, and now it’s slowing down again as rates rise,” Florida-based Redfin agent Luis Rojas said in the report. “I’m advising buyers — especially first-timers — that the mortgage rates they see in the news aren’t the be-all and end-all.”

“Some local lenders are willing to give rates in the 5 percent range for new construction projects because any business is better than no business,” he added.

Email Marian McPherson

homebuying | Redfin
Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription