Home Prices Hit New High, But Buyers Gain Power as Stale Listings Pile Up and Price Drops Become More Common

Written by Posted On Sunday, 23 June 2024 06:50

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

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

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About Redfin
Redfin (www.redfin.com) is a technology-powered real estate broker, instant home-buyer (iBuyer), lender, title insurer, and renovations company. 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. 

https://www.redfin.com

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