Home Sales Post Rare May Decline as Mortgage Rates Rise
June 17 2022 - 4:12PM
Business Wire
Redfin reports home sales fell in May for only
the second time on record, while home prices saw the smallest May
increase on record
(NASDAQ: RDFN) — Home prices rose 1.5% month over month in May,
their smallest increase of any May in Redfin’s records, which go
back to 2012, according to a new report from Redfin (redfin.com),
the technology-powered real estate brokerage.
The housing market cooled considerably as mortgage rates climbed
to their highest levels since 2009. Seasonally-adjusted home sales
fell 3% month over month, their only May decline on record outside
of 2020, when the start of the pandemic sent shockwaves through the
housing market. Despite this decline in demand, the inventory of
homes for sale still fell from a year earlier. As the market
remains tight and new listings also decline, May saw the smallest
drop in active listings since November 2019.
“The sudden and dramatic surge in mortgage rates has been a
shock to the system for housing,” said Redfin chief economist Daryl
Fairweather. “With inflation still at 40-year highs, mortgage rates
are likely to stay elevated for a while, so the market will have to
adjust to this new reality. The good news is that cheap debt is no
longer fueling unsustainable home price growth, and existing
homeowners are in a good position, holding record high home equity
with debt financed at record low mortgage rates. Homebuyers however
are facing mortgage rates near 6%, which means the housing-market
slowdown will likely continue into the fall, but one silver lining
is that homebuyers are facing less competition for the first time
in two years.”
May Highlights
Market Summary
May 2022
Month-Over-Month
Year-Over-Year
Median sale price
$430,600
1.5%
14.8%
Homes sold,
seasonally-adjusted
556,200
-3.0%
-10.2%
Pending sales,
seasonally-adjusted
516,500
0.3%
-9.2%
New listings,
seasonally-adjusted
614,200
0.8%
-4.5%
All Homes for sale,
seasonally-adjusted
1,372,800
-0.7%
-4.3%
Median days on market
16
-1
0
Months of supply
1.4
0
0.1
Sold above list
59.3%
0.4 pts†
5.8 pts†
Median Off-Market Redfin
Estimate
$420,600
1.4%
22.3%
Average Sale-to-list
103.1%
0 pts†
0.9 pts†
Average 30-year fixed mortgage
rate
5.23%
+0.25 pts†
+2.27 pts†
† - “pts” = percentage-point
change
Metro-Level Highlights
Competition
- Indianapolis was the fastest market, with half of all homes
pending sale in just 4 days, the same as a year earlier. Denver,
Omaha, NE, Oklahoma City and Portland, OR were the next fastest
markets, with 5 median days on market.
- In San Jose, CA, 84.5% of homes sold above list price, more
than any other metro Redfin analyzed. Next came 83.6% in Oakland,
CA, 79.3% in Worcester, MA, 76.3% in San Francisco, and 76.0% in
Rochester, NY.
Prices
- North Port, FL had the nation’s highest price growth, rising
30.5% since last year to $475,000. Tampa, FL came next at 28.1%,
followed by Las Vegas (26.8%), Knoxville, TN (25.9%), and Orlando,
FL (25.8%).
- No metros saw price declines in May.
Sales
- Honolulu led the nation in year-over-year sales growth, up
5.0%, followed by Denver, up 4.0%. El Paso, TX rounded out the top
three, with sales up 3.7%.
- West Palm Beach, FL saw the largest decline in sales since last
year, falling 25.5%. Next came Lake County, IL (-22.9%) and
Anaheim, CA (-22.4%).
Inventory
- Elgin, IL had the highest increase in the number of homes for
sale, up 35% year over year, followed by Chicago (18.9%) and
Austin, TX (15.6%).
- Allentown, PA had the largest decrease in overall active
listings, falling 46.3% since last May. It was followed by
Greensboro, NC (-35.2%), Bridgeport, CT (-31.6%) and Hartford, CT
(-29.3%).
Redfin Estimate
- Miami (48.4%) had the largest share of homes predicted to sell
for below list price, according to Redfin Estimate data, followed
by Baton Rouge, LA (40.6%) and Tulsa, OK (40.0%).
- Sacramento, CA (90.8%) had the largest share of homes predicted
to sell at or above list price, followed by Oakland (90.1%) and
Worcester (89.6%).
To view the full report, including charts and methodology,
please visit:
https://www.redfin.com/news/housing-market-may-home-sales-decline/
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate
company. We help people find a place to live with brokerage,
instant home-buying (iBuying), rentals, lending, title insurance,
and renovations services. We sell homes for more money and charge
half the fee. We also run the country's #1 real-estate brokerage
site. Our home-buying customers see homes first with on-demand
tours, and our lending and title services help them close quickly.
Customers selling a home can take an instant cash offer from Redfin
or have our renovations crew fix up their home to sell for top
dollar. Our rentals business empowers millions nationwide to find
apartments and houses for rent. Since launching in 2006, we've
saved customers more than $1 billion in commissions. We serve more
than 100 markets across the U.S. and Canada and employ over 6,000
people.
For more information or to contact a local Redfin real estate
agent, visit www.redfin.com. To learn about housing market trends
and download data, visit the Redfin Data Center. To be added to
Redfin's press release distribution list, email press@redfin.com.
To view Redfin's press center, click here.
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version on businesswire.com: https://www.businesswire.com/news/home/20220617005514/en/
Redfin Journalist Services: Isabelle Novak, 414-861-5861
press@redfin.com
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