Housing costs could come down in the coming
months, as mortgage rates are coming down a bit and there are signs
price growth could slow
(NASDAQ: RDFN) — Pending home sales fell 3.8%, the biggest
year-over-year decline in nearly four months, during the four weeks
ending June 16. That’s according to a new report from Redfin
(redfin.com), the technology-powered real estate brokerage.
Buyers are shying away from earlier steps in the house-hunting
process, too: Redfin’s Homebuyer Demand Index, a measure of
requests for tours and other buying services from Redfin agents,
declined 17% year over year to its lowest level since February.
Buyers are backing off largely because housing costs are
high. The median U.S. home-sale price is up 4.8% to an all-time
high of $396,000, and the median monthly mortgage payment is
$2,781, about $60 below its record high. The weekly average
mortgage rate declined slightly to 6.95% this week, but it’s still
more than double pandemic-era lows.
The irony of near-record-high housing costs: They’re
causing buyers to back off, and enough of them have backed off to
give buyers who remain more negotiating power for certain homes.
The other piece of good news for buyers is that housing costs could
come down soon. There are signs that price growth could lose some
momentum: The share of sellers dropping their list price is at its
highest level since November 2022, and asking-price growth has
already slowed. Mortgage rates have fallen a bit since last week’s
cooler-than-expected inflation report, and they may continue
declining.
New listings are still near historic lows. Another reason
for the decline in pending sales is a lack of new, desirable
listings for buyers to choose from. New listings are up 7.7% year
over year, but they’re sitting well below typical levels for this
time of year; the only time on record June listings have been lower
was in 2023.
Many home listings are becoming stale, sitting on
the market for 30 days or longer without going under contract;
Redfin agents report that most buyers are willing to pay sky-high
housing costs only for move-in ready homes in popular
neighborhoods.
“A few years ago, I never would have told a seller they need to
freshen up their paint, fix their furnace and make sure their roof
is up to date before putting their home on the market–but now, I
tell them to make the house as pretty as they possibly can,” said
Des Bourgeois, a Redfin Premier agent in Detroit. “Buyers are still
out there and they’re willing to pay today’s high prices, but only
if the house is in really good shape. They don’t want to spend
extra money on paint or new appliances.”
Homes that need work and/or aren’t in the most desirable
locations can be a good opportunity for today’s buyers: They’re
selling under asking price in some places–if they do sell. “Things
have reversed since the pandemic,” said Jonathan Ader, a Redfin
Premier agent in the Palm Springs, CA area. “Now, most homes—the
exception is relatively affordable homes that are move-in ready—are
selling under asking price.”
For Redfin economists’ takes on the housing market, please visit
Redfin’s “From Our Economists” page.
Leading indicators
Indicators of homebuying demand and
activity
Value (if applicable)
Recent change
Year-over-year change
Source
Daily average 30-year fixed mortgage
rate
7.02% (June 18)
Down from 7.16% a week earlier; down from
a 5-month high of 7.52% 6 weeks earlier
Up from 6.94%
Mortgage News Daily
Weekly average 30-year fixed mortgage
rate
6.95% (week ending June 13)
Down slightly from 7.03% 2 weeks earlier;
down from a 5-month high of 7.22% about a month earlier
Up from 6.69%
Freddie Mac
Mortgage-purchase applications
(seasonally adjusted)
Increased 2% from a week earlier (as of
week ending June 14)
Down 12%
Report about Mortgage Bankers Association
data
Redfin Homebuyer Demand Index
(seasonally adjusted)
Down 5% from a month earlier to its lowest
level since February (as of week ending June 16)
Down 17%
Redfin Homebuyer Demand Index, a measure
of requests for tours and other homebuying services from Redfin
agents
Touring activity
Up 19% from the start of the year (as of
June 17)
At this time last year, it was also up 19%
from the start of 2023
ShowingTime, a home touring technology
company
Google searches for “home for
sale”
Unchanged from a month earlier (as of June
17)
Down 21%
Google Trends
Key housing-market data
U.S. highlights: Four weeks ending June
16, 2024
Redfin’s national metrics include data
from 400+ U.S. metro areas, and is based on homes listed and/or
sold during the period. Weekly housing-market data goes back
through 2015. Subject to revision.
Four weeks ending June 16, 2024
Year-over-year change
Notes
Median sale price
$396,000
4.8%
All-time high; biggest increase since
March
Median asking price
$411,749
5.5%
Median monthly mortgage payment
$2,781 at a 6.95% mortgage
rate
7.8%
$58 below all-time high set during the 4
weeks ending April 28
Pending sales
86,225
-3.8%
Biggest decline in nearly 4 months
New listings
98,527
7.7%
Active listings
942,916
16.5%
Months of supply
3.2
+0.6 pts.
4 to 5 months of supply is considered
balanced, with a lower number indicating seller’s market
conditions
Share of homes off market in two
weeks
42.1%
Down from 47%
Median days on market
31
+3 days
Share of homes sold above list
price
32.2%
Down from 36%
Share of homes with a price
drop
6.6%
+2.1 pts.
Highest level since Nov. 2022
Average sale-to-list price
ratio
99.7%
-0.2 pts.
Metro-level highlights: Four weeks
ending June 16, 2024
Redfin’s metro-level data includes the 50
most populous U.S. metros. Select metros may be excluded from time
to time to ensure data accuracy.
Metros with biggest year-over-year
increases
Metros with biggest year-over-year
decreases
Notes
Median sale price
Newark, NJ (16.4%)
Anaheim, CA (16%)
Nassau County, NY (14.7%)
New Brunswick, NJ (14.1%)
Milwaukee (10.7%)
Austin, TX (-3.7%)
San Antonio (-1.5%)
Fort Worth, TX (-1.4%)
Portland, OR (-1.1%)
Declined in 4 metros
Pending sales
San Jose, CA (13%)
Columbus, OH (5.7%)
Pittsburgh (5.4%)
Anaheim, CA (4.5%)
Los Angeles (4.3%)
Houston (-14.5%)
West Palm Beach, FL (-12.9%)
Miami (-12.3%)
New Brunswick, NJ (-10.8%)
Atlanta (-10.7%)
Increased in 14 metros
New listings
San Jose, CA (44.1%)
Phoenix (23.6%)
San Diego (21.4%)
Miami (20.5%)
Seattle (17.1%)
Chicago (-9.2%)
Minneapolis (-6.7%)
Atlanta (-5.6%)
Newark, NJ (-4.1%)
Portland, OR (-3.9%)
Declined in 8 metros
To view the full report, including charts, please visit:
https://www.redfin.com/news/housing-market-update-record-high-prices-buyers-gain-power
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate
company. We help people find a place to live with brokerage,
rentals, lending, title insurance, and renovations services. We run
the country's #1 real estate brokerage site. Our customers can save
thousands in fees while working with a top agent. 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 have our renovations crew fix it up 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 $1.6 billion in commissions. We serve more than 100
markets across the U.S. and Canada and employ over 4,000
people.
Redfin’s subsidiaries and affiliated brands include: Bay Equity
Home Loans®, Rent.™, Apartment Guide®, Title Forward® and
WalkScore®.
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240620827197/en/
Redfin Journalist Services: Kenneth Applewhaite
press@redfin.com
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