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Severe winter weather conditions are impeding home sales across the United States, contributing to a steady increase in the median home-sale price, which rose approximately 5% in the first four weeks of January, according to a recent report by real estate company Redfin. Despite the ongoing surge in prices and asking figures, low inventory levels, down by 4% year over year, and increased purchasing power are also identified as key factors influencing the current high prices.
Redfin highlights a substantial year-over-year decline of more than 8% in pending home sales, marking the most significant drop in four months. The adverse impact of severe winter weather, including snowstorms, ice storms, and arctic freezes, has deterred potential homebuyers in affected regions from actively participating in the market.
The Midwest, in particular, has experienced near-record low temperatures, further contributing to the sluggish pace of real estate activity. Redfin agent Christine Kooiker from Michigan notes, “Real estate is usually slow in the Midwest in the winter, but this year it’s even slower than usual because the weather has been so extreme.” However, with inventory scarcity persisting, serious buyers are finding ways to view desirable homes, and agents anticipate increased activity as the spring season approaches.
In contrast, real estate agents in warmer climates report more active engagement from both buyers and sellers, even with mortgage rates remaining stable in the high 6% range. For the first month of 2024, the median home sale price reached around $360,000, with notable year-over-year increases in metros such as Anaheim, California (13.6%); New Brunswick, New Jersey (13.5%); and Miami, Florida (13.3%).
The challenges posed by severe winter weather contribute to the broader real estate landscape, which saw a significant slump in home sales in December, marking the conclusion of the worst year for home sales since 1995, according to data from the National Association of Realtors.