SEATTLE–(COMMERCIAL WIRE)–(NASDAQ: RDFN) —Demand for early-stage home purchases continues to decline this spring, as new properties for sale fell 7% from a year ago, according to a new report from Redfin (redfin.com) , the technology – driven real estate agency . At the same time, the average 30-year fixed mortgage rate soared to 5% and the median sales price jumped to $397,747, sending the typical homebuyer’s monthly payment up 35% year-over-year to a all-time high of $2,288.
Here are the key early indicators that demand is weakening at a time of year when it typically surges:
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Fewer people searched for “homes for sale” on Google: Searches for the week ending April 9 were down 3% from a year earlier.
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Redfin’s seasonally adjusted homebuyer demand index, a measure of requests for home tours and other home buying services from Redfin agents, has decreased 3% over the past four weeks, compared to a 5% increase over the same period last year. The index rose 2% from a year earlier.
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Touring activity from the first week of January through April 10 was 23 percentage points below the same period in 2021, according to home touring technology company ShowingTime.
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Mortgage purchase applications fell 6% from a year earlier, while the seasonally adjusted index rose 1% week-over-week for the week ending April 8.
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For the week ending April 14, 30-year mortgage rates rose to 5%, the highest level since February 2011. This was up from 4.72% in the previous week and the fastest increase in three months since May 1994.
Redfin is also closely watching the accelerating share of home listings with price drops, which are rising at their fastest spring rate since at least 2015, another sign that demand isn’t meeting sellers’ expectations.
“There really is a limit to homebuyer demand, although the market in recent years has made it seem endless,” said Redfin chief economist Daryl Fairweather. “The sharp rise in mortgage rates is pushing more homebuyers out of the market, but it also appears to be deterring some homeowners from selling. With demand and supply falling, the market is not likely to change anytime soon from a seller’s market to a buyer’s market.”
Despite these early signs that the market is slowing, it still feels as hot as ever for homebuyers, with new records set for the speed of home sales and price increases, according to data going back to 2015. Forty-five percent of contract homes that sank found a buyer within a week, and the average home that sold was 2.4% above its asking price.
“If a house is on the market for more than a week, people start to wonder why or assume something is wrong with it,” said Redfin Boston realtor James Gulden. “Every offer I’ve written recently has been faced with multiple offers, but some people finally got tired of all the competition and are pulling out. They are less and less willing to make a risky offer in a high stress bidding war situation.”
Key housing market takeaways for 400+ US metro areas:
Unless otherwise stated, these data cover the four-week period ending April 10. Weekly housing market data from Redfin goes back to 2015.
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The median home sales price increased 17% year over year to an all-time high of $389,178.
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The median sales price of newly listed homes increased 14% year over year to $397,747.
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The monthly mortgage payment on the median sales price rose to a record $2,288 at the current 5% mortgage rate. This was 35% more than the previous year, when mortgage rates were 3.04%.
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Pending home sales increased 1% year over year.
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New home listings for sale fell 7% from a year earlier, the 21st consecutive annual drop.
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Active listings (the number of homes listed for sale at any time during the period) fell 23% year over year.
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58% of the homes that were contracted had an offer accepted within the first two weeks on the market, an all-time high. This was up from the previous year’s rate of 55%.
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44% of houses that were contracted had an offer accepted within a week of going on the market, an all-time high. This was an increase of 41% over the same period the previous year.
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Homes that did sell were on the market for an average of 18 days, up from 26 days a year earlier.
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54% of homes sold above list price, up from 42% a year earlier, and just shy of the all-time high recorded in July 2021.
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On average, 3.2% of homes for sale each week saw a price drop, with 13% falling in price in the last four weeks. That’s an increase of 10% from the previous month and 9% a year ago. The share of price drop listings is increasing faster this time of year than it has since at least 2015. Typically, during this time of year, the share of price drop homes decreases slightly month over month.
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The median sales price to list price ratio, which measures how close homes are selling to their asking prices, rose to an all-time high of 102.4%. In other words, the average house sold for 2.4% above its asking price. This increased from 100.4% in 2021.
To view the full report including charts and methodology, please visit: https://www.redfin.com/news/housing-market-update-demand-slips-more-price-drops/
About Redfin
Redfin (www.redfin.com) is a technology-driven real estate company. We help people find a place to live with brokerage, iBuying, rentals, loans, title insurance and renovation services. We sell houses for more money and charge half the rate. We also run the number 1 real estate brokerage site in the country. Our home-buying clients see homes first with on-demand tours, and our loan and title services help them close fast. Customers who sell a home can receive an instant cash offer from Redfin or have their home fixed up by our renovations team to sell it for the best price. Our rental business enables millions of people across the country to find apartments and houses for rent. Since its launch in 2006, we have saved clients over a billion dollars in fees. We serve more than 100 markets in the US and Canada and employ more than 6,000 people.
For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about real estate market trends and download data, visit the Redfin Data Center. To be added to Redfin’s press release distribution list, send an email to press@redfin.com. To view Redfin’s press center, click here.
