Redfin’s Homebuyer Demand Index jumped as prices fell for the sixth-straight week and mortgage rates declined for the third week in a row. But a lack of new listings is holding back sales.
House hunters are wading into the market as mortgage rates and home prices continue to decline, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.
Mortgage-purchase applications increased for the fourth week in a row and Redfin’s Homebuyer Demand Index—a seasonally adjusted measure of requests to tour homes, make an offer and/or talk to a Redfin agent about a home search—jumped to its highest level since last May during the week ending March 26.
“My phone is ringing, and it’s usually first-time buyers or investors,” said San Francisco Redfin agent Ali Mafi. “First-time buyers are interested in looking at homes because prices have come down, though they’re still concerned about high mortgage rates. Investors who can pay in cash are honing in on luxury San Francisco condos because prices on those have dropped even more significantly than the overall market.”
The uptick in early-stage demand has yet to translate into more home sales. Pending sales dropped 19% year over year nationwide in the four weeks ending March 26, the biggest decline in about two months. Demand for homes hasn’t yet translated into an improvement in sales mainly because would-be buyers are limited by lack of supply.
New listings of homes for sale declined 22%, one of the biggest drops since the start of the pandemic; homeowners are reluctant to sell because they don’t want to give up a low mortgage rate. The lack of new listings is causing a growing share of homes to fly off the market quickly: Nearly half of homes are selling within two weeks, the largest share since June.
Home prices drop in over half of the country, but rise in some areas
While the scarcity of new listings is holding back sales nearly everywhere in the U.S., prices are dropping fast in some parts of the country and increasing in others.
Home prices dropped in more than half (28) of the 50 most populous U.S. metros, with the biggest drop in Austin, TX (-15.2% YoY). Next come four northern California metros: San Jose, CA (-12.9%), San Francisco (-11.7%), Sacramento, CA (-11.4%), and Oakland, CA (-10.8%). Those are the biggest annual declines since at least 2015 for Austin and Sacramento.
On the flip side, sale prices increased most in Milwaukee, where they rose 14.1% year over year. Next come Fort Lauderdale, FL (8.5% YoY), Virginia Beach, VA (6.9%), West Palm Beach, FL (6.7%) and Providence, RI (6.4%).
On a national level, the median U.S. home-sale price fell 1.8% year over year to $360,500, marking the sixth straight week of declines after more than a decade of increases.
“Prices are still rising quickly in some places while they are down by double digits in big tech hubs, so it’s important for prospective buyers to work with an expert local agent,” said Redfin Deputy Chief Economist Taylor Marr. “One thing that’s true almost everywhere: It’s difficult to find a desirable, well-priced home for sale, so offer and negotiation strategies differ depending on where you’re looking.”
Leading indicators of homebuying activity:
Key housing market takeaways for 400+ U.S. metro areas:
Unless otherwise noted, this data covers the four-week period ending March 26. Redfin’s weekly housing market data goes back through 2015.
To view the full report, including charts, please visit:
https://www.redfin.com/news/housing-market-update-homebuying-demand-increases
Despite slim pickings and affordability challenges, buyers got a jump on spring shopping in March, but rising rates could cause a late-spring frost
Spring is officially here, and like green shoots emerging from the bleak winter, new data suggests that more buyers are back in the market, although more subdued compared to a year ago. According to the Realtor.com® Monthly Housing Trends Report released today, the recent six-month surge in active listings lost momentum, moderating to 59.9% year-over-year, and time on market shrank to 54 days, from January’s high of 74 days, as buyers eased back into the market in March, but higher mortgage rates could freeze them back out.
“Signs show that buyers are active in the spring housing market, even if they aren’t as numerous as they were during the pandemic. Amid fewer new choices on the market and still rising home prices, home shoppers have shown that they are very rate sensitive, only jumping back in the market when rates dip, and so what happens with rates this spring will likely play a strong role in determining whether the housing market bumps along or picks up speed this year,” said Danielle Hale, Chief Economist for Realtor.com®. “With so much built up equity, home sellers are still faring well, but many are sitting on the sidelines. The usual seasonal pick-up in buyer demand appears to be underway, one of several factors that make spring the Best Time to Sell. With an uncertain market ahead, it may be even more important for potential sellers to aim for this year’s seasonal sweet spot.”
Now may be the best time to sell, and homeowners need to put their best foot forward
If homeowners are planning to sell in 2023, now is the time to get ready. Realtor.com®’s Best Time to Sell analysis found that nationally, the week of April 16-22, 2023 will bring sellers the best combination of market conditions this year, including higher home prices, fewer other homes for sale, a faster sale, and stronger demand.
"Well-priced, move-in ready homes with curb appeal in desirable areas are still receiving multiple offers and selling for over the asking price in many parts of the country," said Realtor.com®'s Executive News Editor Clare Trapasso. "So this spring, it's especially important for sellers to make their homes as attractive as possible to appeal to as many buyers as possible. They should make any necessary repairs, spruce up the landscaping, and invest in staging and professional photographs. Homes that are priced too high, are in need of major repairs, or aren't presented professionally are often sitting on the market for longer and sometimes selling for under the initial asking price."
March 2023 Housing Metrics – National
Metric |
Change over March 2022 |
Change over March 2019 |
Median listing price |
+6.3% (to $424,000) |
+38.8% |
Active listings |
+59.9% |
-49.5% |
New listings |
-20.1% |
-26.9% |
Median days on market |
+18 days (to 54 days) |
-18 days |
Share of active listings with price reductions |
+6.8 percentage points (to 12.6%) |
-2.3 percentage points |
Lack of new homes coming on to the market a drag on home sales
The U.S. inventory of active listings continued to climb in March over last year’s lows, but the rate of growth cooled slightly from the brisk pace seen the previous two months. With new listings remaining scarce in March, the rise in the number of homes for sale is a reflection of more time spent on the market compared to last year rather than an influx of new sellers. A lack of new homes to the market continues to be a drag on home sales; attitudes toward housing worsened in February, especially among potential sellers, which likely signals ongoing weakness in the number of new homes for sale this year. Higher interest rates continue to create affordability challenges for buyers, and fewer homes went under contract compared to last year.
Home prices continue to rise but could decline compared to last year as early as summer
In March, national median list prices continued to rise year-over-year, but the rate at which prices are rising slowed to the lowest level since June 2020, in the early months of the COVID-19 pandemic. At this rate of slowing, list prices could decline relative to last year as early as this summer, following the recent national median sale price decline, which fell annually for the first time in 10 years last month. The share of homes with price reductions is up significantly from last year, but dipped below 2017–2019 pre-pandemic levels in February and continued to decline in March, indicating that the smaller number of homeowners who are putting their homes up for sale appear to be readjusting their home price expectations to the realities of today’s market.
Homes are taking longer to sell, but not as long as pre-pandemic levels
A typical home spent more time on market compared to last year, although after rising steadily from summer 2022, the usual seasonal pickup in the sales pace shrank the gap and homes sold faster in March than in January and February, suggesting that buyers are active in the market, even if they are not as numerous as this time last year. Even though the typical home listing was on the market for more than two weeks longer than this time last year, homes are still selling just over two weeks faster on average than before the pandemic boom.
March 2023 Housing Metrics – 50 Largest U.S. Metro Areas
Metro Area |
Median Listing Price |
Median Listing Price YoY |
Median Listing Price per Sq. Ft. YoY |
Active Listing Count YoY |
New Listing Count YoY |
Median Days on Market |
Median Days on Market Y-Y (Days) |
Price Reduced Share |
Price Reduced Share Y-Y (Percentage Points) |
$410,000 |
2.5% |
0.9% |
70.0% |
-16.6% |
47 |
13 |
13.0% |
7.3 pp |
|
$550,000 |
-8.4% |
-10.7% |
312.2% |
1.1% |
52 |
37 |
26.5% |
21.6 pp |
|
$348,000 |
7.5% |
4.0% |
14.1% |
-27.1% |
44 |
12 |
10.2% |
2.9 pp |
|
$279,000 |
5.2% |
5.7% |
63.3% |
-15.7% |
54 |
20 |
13.1% |
6.7 pp |
|
$824,000 |
9.9% |
-0.8% |
24.0% |
-39.6% |
30 |
12 |
8.4% |
4.0 pp |
|
$246,000 |
11.9% |
8.8% |
22.4% |
-10.8% |
46 |
3 |
5.6% |
2.6 pp |
|
$401,000 |
0.2% |
1.7% |
110.0% |
-2.6% |
43 |
24 |
12.3% |
6.8 pp |
|
$352,000 |
5.9% |
-4.4% |
1.6% |
-27.6% |
42 |
6 |
9.1% |
3.2 pp |
|
$367,000 |
15.0% |
4.2% |
19.3% |
-24.2% |
43 |
8 |
8.1% |
3.8 pp |
|
$211,000 |
11.0% |
8.4% |
18.7% |
-21.0% |
47 |
5 |
9.5% |
3.4 pp |
|
$375,000 |
12.8% |
5.2% |
26.9% |
-19.6% |
32 |
16 |
12.0% |
6.8 pp |
|
$442,000 |
4.0% |
0.0% |
172.0% |
3.2% |
46 |
22 |
15.5% |
11.5 pp |
|
$655,000 |
-1.2% |
0.2% |
86.3% |
-17.1% |
28 |
22 |
12.8% |
9.3 pp |
|
$236,000 |
3.8% |
0.8% |
24.5% |
-25.8% |
49 |
22 |
12.1% |
4.0 pp |
|
$403,000 |
15.1% |
5.3% |
-17.0% |
-35.0% |
36 |
10 |
4.5% |
0.6 pp |
|
$361,000 |
-3.3% |
-1.4% |
63.2% |
-9.8% |
49 |
11 |
13.8% |
6.4 pp |
|
$311,000 |
4.8% |
4.9% |
71.1% |
-7.6% |
49 |
15 |
13.1% |
6.5 pp |
|
$400,000 |
0.5% |
1.9% |
176.6% |
1.7% |
54 |
18 |
17.0% |
12.2 pp |
|
$455,000 |
17.7% |
11.1% |
68.0% |
-26.4% |
82 |
37 |
8.3% |
4.7 pp |
|
$450,000 |
-6.7% |
-3.7% |
86.1% |
-30.7% |
55 |
30 |
20.1% |
12.3 pp |
|
$1,000,000 |
2.5% |
2.6% |
33.2% |
-35.7% |
47 |
17 |
9.3% |
5.3 pp |
|
$305,000 |
5.2% |
1.0% |
36.2% |
-27.1% |
37 |
14 |
13.0% |
6.7 pp |
|
$319,000 |
40.3% |
17.4% |
117.4% |
-7.8% |
54 |
18 |
14.5% |
8.2 pp |
|
$599,000 |
10.1% |
2.9% |
87.8% |
-15.7% |
63 |
20 |
14.2% |
9.7 pp |
|
$366,000 |
26.3% |
10.8% |
-17.2% |
-18.8% |
33 |
4 |
7.2% |
1.8 pp |
|
$451,000 |
8.8% |
16.1% |
15.3% |
-27.7% |
40 |
11 |
7.1% |
3.5 pp |
|
$527,000 |
5.5% |
-0.1% |
253.3% |
7.4% |
36 |
25 |
18.1% |
12.9 pp |
|
$330,000 |
-5.1% |
-2.9% |
109.0% |
1.4% |
59 |
15 |
18.4% |
8.2 pp |
|
$699,000 |
7.6% |
6.4% |
-0.9% |
-29.2% |
61 |
15 |
7.3% |
1.9 pp |
|
$350,000 |
3.3% |
4.6% |
129.1% |
-19.7% |
51 |
15 |
12.0% |
6.3 pp |
|
$441,000 |
6.9% |
4.1% |
136.4% |
-14.6% |
54 |
23 |
13.7% |
8.8 pp |
|
$327,000 |
5.6% |
2.9% |
15.0% |
-25.3% |
53 |
15 |
10.9% |
3.7 pp |
|
$499,000 |
-0.1% |
-3.3% |
184.6% |
-22.1% |
51 |
23 |
24.4% |
18.2 pp |
|
$215,000 |
-2.3% |
-2.1% |
27.0% |
-10.9% |
65 |
8 |
12.1% |
4.2 pp |
|
$615,000 |
7.0% |
-1.8% |
57.9% |
-32.1% |
45 |
18 |
10.3% |
0.9 pp |
|
$513,000 |
16.0% |
6.9% |
17.4% |
-40.0% |
42 |
11 |
5.8% |
2.1 pp |
|
$450,000 |
0.0% |
-3.1% |
273.7% |
3.4% |
53 |
42 |
12.3% |
9.3 pp |
|
$402,000 |
12.1% |
6.8% |
51.4% |
-19.8% |
44 |
11 |
7.7% |
5.1 pp |
|
$559,000 |
-2.4% |
1.2% |
71.1% |
-33.9% |
56 |
26 |
12.4% |
7.4 pp |
|
$257,000 |
17.1% |
10.1% |
8.2% |
-25.1% |
26 |
15 |
6.8% |
2.0 pp |
|
$627,000 |
-0.4% |
-4.8% |
14.5% |
-44.5% |
43 |
19 |
9.9% |
3.4 pp |
|
$347,000 |
0.3% |
-0.3% |
161.1% |
6.4% |
57 |
20 |
17.4% |
12.4 pp |
|
$950,000 |
7.7% |
3.2% |
24.6% |
-35.9% |
37 |
12 |
9.6% |
5.9 pp |
|
$1,080,000 |
3.1% |
-2.5% |
5.2% |
-39.0% |
34 |
12 |
9.0% |
4.8 pp |
|
$1,495,000 |
6.8% |
0.2% |
10.9% |
-39.7% |
28 |
13 |
7.2% |
4.4 pp |
|
$789,000 |
5.2% |
3.0% |
66.3% |
-27.8% |
33 |
15 |
9.4% |
6.8 pp |
|
$237,000 |
N/A* |
N/A* |
N/A* |
N/A* |
55 |
8 |
9.8% |
3.4 pp |
|
$411,000 |
2.8% |
1.4% |
187.6% |
-6.6% |
52 |
22 |
18.9% |
13.8 pp |
|
$373,000 |
14.2% |
6.8% |
23.3% |
-23.7% |
39 |
17 |
11.0% |
6.0 pp |
|
$599,000 |
10.0% |
0.5% |
14.2% |
-27.0% |
36 |
9 |
7.7% |
2.3 pp |
*Some St. Louis listing metrics have been excluded while data is under review.
Methodology
Realtor.com® housing data as of March 2023. Listings include the active inventory of existing single-family homes and condos/townhomes/rowhomes/co-ops for the given level of geography on Realtor.com; new construction is excluded unless listed via an MLS that provides listing data to Realtor.com. Realtor.com® data history goes back to July 2016. 50 largest U.S. metropolitan areas as defined by the Office of Management and Budget (OMB).
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