Redfin Reports Balance Is Returning to the Housing Market as Competition Eases
July 07 2022 - 2:58PM
Business Wire
Homebuyers are getting some relief as sellers
slash their prices at a record rate and mortgage rates drop
following months of increases
(NASDAQ: RDFN) —After months of tipping heavily in sellers’
favor, the scales of the housing market are finally balancing out,
according to a new report from Redfin (redfin.com), the
technology-powered real estate brokerage.
Soaring housing costs caused many house hunters to drop out in
recent months, which is now providing some relief for buyers who
remain. Today’s buyers are seeing the housing shortage ease, price
growth slow, competition decline and mortgage rates drop from their
2022 high. The share of sellers slashing their asking prices hit a
record high during the four weeks ending July 3, and the portion of
homes going for above list price fell for the first time since June
2020 as sellers responded to waning homebuyer demand.
“Conditions for homebuyers are improving. Housing remains
expensive, but mortgage rates just posted their biggest weekly drop
since 2008, which makes buying a home a bit more affordable,” said
Redfin chief economist Daryl Fairweather. “One way buyers can take
advantage of the shift in the market is seeking concessions from
sellers. That could include asking the seller to buy down your
mortgage rate, pay for repairs or cover some of your closing
costs.”
“The market slowdown is giving buyers more opportunities to
negotiate, especially with sellers whose homes have been on the
market for a while,” said Columbia, SC Redfin real estate agent
Jessica Nelson. “I tell my sellers that they need to price their
homes realistically from the get-go. If they don't, their home may
end up sitting on the market and they may have to drop their
price—possibly more than once—to attract buyers.”
Leading indicators of homebuying activity:
- For the week ending July 7, 30-year mortgage rates fell to
5.3%—the largest 1-week drop since 2008. This was down from a 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
during the week ending July 2 were down 2% from a year
earlier.
- The seasonally-adjusted Redfin Homebuyer Demand Index—a measure
of requests for home tours and other home-buying services from
Redfin agents—was down 15% year over year during the week ending
July 3.
- Touring activity as of July 3 was down 14% from the start of
the year, compared to a 7% increase at the same time last year,
according to home tour technology company ShowingTime.
- Mortgage purchase applications were down 17% from a year
earlier during the week ending July 1, while the
seasonally-adjusted index was down 4% week over week.
Key housing market takeaways for 400+ U.S. metro
areas:
Unless otherwise noted, this data covers the four-week period
ending July 3. Redfin’s weekly housing market data goes back
through 2015.
- The median home sale price was up 13% year over year to
$396,000. This growth rate is down from the March peak of 16%.
- The median asking price of newly listed homes increased 15%
year over year to $399,973, but was down 2.1% from the all-time
high set during the four-week period ending June 5.
- The monthly mortgage payment on the median asking price home
hit $2,342 at the current 5.3% mortgage rate, up 40% from $1,668 a
year earlier, when mortgage rates were 2.9%. That’s down slightly
from the peak of $2,487 reached during the four weeks ending June
12.
- Pending home sales were down 13% year over year, the largest
decline since May 2020.
- New listings of homes for sale were down 1.4% from a year
earlier.
- Active listings (the number of homes listed for sale at any
point during the period) fell 2% year over year—the smallest
decline since October 2019.
- 45% of homes that went under contract had an accepted offer
within the first two weeks on the market, down from 49% a year
earlier.
- 32% of homes that went under contract had an accepted offer
within one week of hitting the market, down from 35% a year
earlier.
- Homes that sold were on the market for a median of 18 days,
flat from a year earlier and up slightly from the record low of 15
days set in May and early June.
- 52% of homes sold above list price, down from 53% a year
earlier. This measure peaked in mid-May and has declined 3.8 points
since then.
- On average, 7% of homes for sale each week had a price drop, a
record high as far back as the data goes, through the beginning of
2015.
- The average sale-to-list price ratio, which measures how close
homes are selling to their asking prices, declined to 101.9%. In
other words, the average home sold for 1.9% above its asking price.
This was down from 102.2% a year earlier.
To view the full report, including charts and methodology,
please visit:
https://www.redfin.com/news/housing-market-update-balance-reutrning/
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/20220707005742/en/
Contact Redfin Redfin Journalist Services: Kenneth
Applewhaite, 206-588-6863 press@redfin.com
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