Inflation and high mortgage rates are eating away at homebuyers’ budgets, leading to lower sales and supply gains
(NASDAQ: RDFN) – The median sale price of U.S. homes fell 0.7% from its record high in June in the four weeks ending July 10, according to a new report by Redfin (redfin.com), technology-powered real estate brokerage.
Sellers’ asking prices were also down 3% from their peak in May, as the share of homes with price cuts hit a new high. Housing supply posted its first year-over-year increase since August 2019 as pending sales continued to decline. These changes in the housing market can be attributed to buyers reaching their cost limit, not only for homes and mortgages, but also for food, transportation and energy.
“Inflation and high mortgage rates are eating away at homebuyers’ budgets,” said Redfin chief economist Daryl Fairweather. more than two years ago in some areas, so homes are starting to pile up on the market. As a result, prices are starting to decline from their all-time highs. We expect this environment of reduced competition and falling house prices will continue for at least the next few months.”
Leading indicators of home buying activity:
- For the week ending July 14, 30-year mortgage rates rose to 5.51%. That was down from the 2022 high of 5.81%, but up from 3.11% at the start of the year.
- Fewer people searched for “homes for sale” on Google: Searches in the week ending July 9 were down 5% from a year earlier.
- The seasonally-adjusted Redfin Homebuyer Demand Index – a measure of requests for home visits and other home-buying services from Redfin agents – was down 18% year-over-year during the week ending July 10.
- Touring activity as of July 10 was up 1% from the start of the year, compared with a 23% increase in the same period last year, according to home touring technology company ShowingTime.
- Mortgage purchase requests were down 18% year-on-year in the week ending July 8, while the seasonally adjusted index was down 4% week-over-week .
Housing Market Highlights for 400+ U.S. Metro Areas:
Unless otherwise stated, data in this report covers the four-week period ending July 10. Redfin’s weekly housing market data dates back to 2015.
Data based on homes put up for sale and/or sold over the period:
- The median home sale price rose 12% year over year to $393,449. This is down 0.7% from the peak reached in the four-week period ending June 19. A year ago, the median price had increased by 0.9% over the same period. The year-over-year growth rate was down from the March high of 16%.
- The median asking price for newly listed homes rose 14% year-over-year to $397,475, but was down 2.8% from the all-time high reached in the four-week period ending May 22. 0.9%.
- The monthly mortgage payment on the median asking price reached $2,387 at the current mortgage rate of 5.51%, up 44% from $1,663 a year earlier, when mortgage rates were 2.88% . This is down slightly from the high of $2,487 reached in the four weeks ending June 12.
- Pending home sales fell 14% year over year, the biggest drop since May 2020.
- New home listings for sale were down 1.7% from a year earlier.
- Active listings (the number of homes listed for sale at any time during the period) rose 1.3% year over year, the largest increase since August 2019.
- 43% of homes under contract had an offer accepted within the first two weeks on the market, compared to 47% a year earlier.
- 29% of homes under contract had an offer accepted within a week of being put on the market, compared to 33% a year earlier.
- Homes sold were on the market for a median of 18 days, flat from a year earlier and slightly up from the record 15-day low set in May and early June.
- 51% of homes sold above the list price, compared to 54% a year earlier.
- On average, 7.1% of homes for sale each week saw a price drop, a record as far back as the data goes, to early 2015.
- The average sale price to listing price ratio, which measures how well homes are selling relative to their asking price, fell to 101.6%. In other words, the average home sold for 1.6% above its asking price. This figure was down from 102.2% a year earlier.
To view the full report, including charts and methodology, please visit:
Redfin(www.redfin.com) is a technology-driven real estate company. We help people find a home with brokerage, instant home buying (iBuying), rental, loan, title insurance, and home improvement services. We sell houses for more money and charge half the fees. We also run the #1 real estate brokerage site in the country. Our homebuyer clients see homes first with on-demand viewings, and our loan and title services help them close quickly. Customers selling a home can receive an instant cash offer from Redfin or have our renovation team repair their home to sell for the best price. Our rental business helps millions of people across the country find apartments and houses to rent. Since launching in 2006, we’ve saved our clients over $1 billion in commissions. We serve over 100 markets in the United States and Canada and employ over 6,000 people.
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