by Rachel Musiker | Redfin.Com
Troy Warren for CNT
Home-selling speed and competition have passed their record-high peaks, meaning the market is starting to feel slightly more welcoming to buyers. But most homes still sell within two weeks and for more than list price.
Most signs point to a cooling housing market. Pending home sales posted their smallest year-over-year increase (7%) since late June 2020. The supply of homes for sale continued to plateau as the number of newly listed homes for sale followed its slow seasonal decline.
Home sale prices–a lagging indicator and a notable exception to the cooling trend–continued their steady ascent, up 19% year over year. Homebuying competition passed its lofty peak; the majority of homes are still finding buyers within two weeks and selling for above their asking price, leaving many buyers wondering when they may start to feel the chillier conditions.
Some of those buyers have grown weary, with online home searches, in-person tours and mortgage applications all on the decline.
It seems that some home sellers have realized the market is falling a bit out of their favor, as asking prices have been slowly sliding from their late-June high. A small but growing number of sellers are figuring that out the hard way–4.5% lowered their list price, the highest share since November 2019.
“Home sellers are increasingly having to lower their expectations,” said Redfin Chief Economist Daryl Fairweather. “Many homebuyers have turned to the rental market amid such high home prices, but now with rental prices growing, I expect many will return to the housing market by spring of next year. The transition to this new slightly cooler phase of the housing market will happen unevenly depending on the location and the desirability of the home. If you are currently looking to buy a home, I recommend that you do your research on how much attention the home is getting before you put in your offer. If you find a home without any other offers, you may be able to get it for below the list price and with inspection and financing contingencies intact.”
Key housing market takeaways for 400+ U.S. metro areas:
Unless otherwise noted, the data in this report covers the four-week period ending July 25. Redfin’s housing market data goes back through 2012.
Data based on homes listed and/or sold during the period:
- The median home-sale price increased 19% year over year to $364,250, a record high.
- Asking prices of newly listed homes were up 12% from the same time a year ago to a median of $357,975, down 1.2% from their all-time high posted four weeks earlier.
- Pending home sales were up 7%, the smallest year-over-year increase since the four-week period ending June 27, 2020. They fell 12% from their 2021 peak hit during the four-week period ending May 30—a seasonal decline that’s to be expected but is slightly larger than the drop in years past. By comparison, pending sales dropped 8% during the same period in 2019.
- New listings of homes for sale were flat from a year earlier. The number of homes being listed is following a largely seasonal decline–down 10% from the 2021 peak during the four-week period ending May 23–albeit slower than the 14% decline during the same period in 2019.
- Active listings (the number of homes listed for sale at any point during the period) fell 27% from the same period in 2020—the smallest decline since the four-week period ending January 3. Active listings were up 12% from their 2021 low during the four-week period ending March 7 but have remained largely flat since late June.
- 51% of homes that went under contract had an accepted offer within the first two weeks on the market, well above the 44% rate during the same period a year ago, but down 5.7 percentage points from the high point of the year, set during the four-week period ending March 28.
- 37% 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 6.2 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 16 days, one day slower than the all-time low set in mid-June, and 20 days faster than a year ago.
- A record 55% of homes sold above list price, up from 29% a year earlier. This measure is plateauing, clocking in at 54-55% since the four-week period ending June 27.
- At 4.5%, the share of homes for sale with price drops inched closer to 2019 levels (4.6%), surpassing last year’s rate of 3.6%.
- The average sale-to-list price ratio, which measures how close homes are selling to their asking prices, fell to 102.2%—slightly below the peak set in XX. In other words, the average home sold for 2.2% above its asking price. This measure was 3.3 percentage points higher than a year earlier.
Other leading indicators of homebuying activity:
- Mortgage purchase applications during the week ending July 23 fell 2% week over week (seasonally adjusted) to their lowest level since May 2020. For the week ending July 29, 30-year mortgage rates averaged 2.80%.
- From January 1 to July 27, home tours were up 18%, compared to a 45% increase over the same period last year, according to home tour technology company ShowingTime.
- Two-year growth in google searches for “home for sale” and “real estate” has slowed in recent weeks.
- The seasonally adjusted Redfin Homebuyer Demand Index—a measure of requests for home tours and other services from Redfin agents—fell slightly during the week ending July 25, and is currently up 17% from a year earlier.
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