by Tim Ellis and Taylor Marr | RedFin.Com
Troy Warren for CNT
Even though more homes are hitting the market, homebuyers appear to have tapped out of the market as pending sales continued to slip.
Sellers are coming back to the housing market. The number of homes newly listed for sale surpassed 2019 levels for the first time since the start of the year during the four weeks ending July 4. Despite a long-awaited increase in the supply of homes for sale, homebuying demand continued to slip, leaving the market feeling a few degrees cooler.
Pending sales posted their smallest year-over-year increase in almost a year, and fell twice as fast month over month as they did during this same time in 2009. The Redfin Homebuyer Demand Index—a measure of requests for home tours and other services from Redfin agents—also fell 1.2% week-over-week, and there was a similar decline in mortgage purchase applications.
Despite the softening, the housing market is still very much tilted in sellers’ favor. Home prices are at record highs and more than 20% above the level they were a year earlier, and homes continued to sell faster than ever, with the typical home lasting just 15 days on the market. However, days on market have been flat for the past four weeks after falling for 18 straight weeks between February and June, and the share of homes sold above list price has flatlined after sharply rising over the same period.
Unless otherwise noted, the data in this report covers the four-week period ending July 4. Redfin’s housing market data goes back through 2012.
“Many buyers have backed away from the housing market and are waiting until more and better homes are listed,” said Redfin Chief Economist Daryl Fairweather. “Buyers don’t have the same sense of urgency that they did at the beginning of the year. They aren’t racing to buy before prices increase, because asking prices have already increased and stabilized. And they aren’t racing to buy before mortgage rates go up, because rates have dropped back below 3% and are likely to stay low. With more new listings starting to come on the market, buyers who threw in the towel may want to look again because the market is tilting more in their favor.”
Key housing market takeaways for 400+ U.S. metro areas:
Data based on homes listed and/or sold during the period:
- The median home-sale price increased 22% year over year to $364,430, a record high.
- Asking prices of newly listed homes were up 12% from the same time a year ago to a median of $359,500. This was down 1.1% from the four-week period ending June 27.
- Pending home sales were up 17% year over year, the smallest increase in almost a year, since the four-week period ending July 19, 2020. Pending sales were down 6% from the four-week period ending May 30, compared to a 3% decrease over the same period in 2019.
- New listings of homes for sale were up 4% from a year earlier, and were up 3% from the same period in 2019. This was the first time new listings have surpassed 2019 levels since the beginning of the year.
- Active listings (the number of homes listed for sale at any point during the period) fell 32% from 2020—the smallest decline since the four-week period ending February 7—but have climbed 8% since their 2021 low during the four week period ending March 7.
- 54% of homes that went under contract had an accepted offer within the first two weeks on the market, well above the 45% rate during the same period a year ago, but down 2.7 percentage points from the high point of the year, set during the four-week period ending March 28.
- 40% of homes that went under contract had an accepted offer within one week of hitting the market, up from 32% during the same period a year earlier, but down 3 percentage points from the high point of the year, set during the four-week period ending March 28.
- Homes that sold were on the market for a median of 15 days, an all-time low that has been flat for the last four weeks, and down from 39 days a year earlier.
- A record 55% of homes sold above list price, up from 27% a year earlier.
- The share of homes for sale with price drops rose to 4%, continuing to surpass 2020 level, and climbing closer to 2019 levels (4.6%).
- The average sale-to-list price ratio, which measures how close homes are selling to their asking prices, increased to 102.4%. In other words, the average home sold for 2.4% above its asking price. This measure is an all-time high and 3.7 percentage points higher than a year earlier.
Other other leading indicators of homebuying activity:
- Mortgage purchase applications decreased 1% week over week (seasonally adjusted) during the week ending July 2. For the week ending July 8 30-year mortgage rates fell to 2.9%, the lowest level since mid-February.
- From January 1 to July 4, home tours went up 2%, compared to a 27% increase over the same period last year according to home tour technology company ShowingTime.
- The seasonally adjusted Redfin Homebuyer Demand Index—a measure of requests for home tours and other services from Redfin agents—fell during the week ending July 4, but the drop was much smaller than it was over the holiday weekend last year, and the demand index is currently up 12% from a year earlier.
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