According to a new report from Redfin, the asking price on homes increased 12% to an all-time high, while pending sales were up just 4% — the smallest year-over-year increase since June 2020.
Asking prices of newly listed homes were up 12% from the same time a year ago to a median of $361,250, an all-time high. Asking prices have been rising throughout September, in a typical late-summer seasonal uptick.
Other housing market measures continue to show a typical seasonal cooling with fewer than half of homes selling above list price and new listings of homes for sale down 20% from their 2021 peak. The reduction in home listings can be attributed to the tightening of supply, considering that the number of active listings fell 22% from 2020.
Additional Redfin data covers the four-week period ending Sept. 26, 2021. During that period, the median home-sale price increased 13% year over year to $356,358. This was up 0.2% from the four-week period ending Sept 19. Meanwhile, new listings of homes for sale were down 8% from a year earlier, and have stayed below 2020 levels since the four-week period ending August 22.
“Home sellers continue to show their optimism with increasing asking prices," said Redfin chief economist Daryl Fairweather. "However, there are already signals from the Fed and markets that mortgage rates are starting to creep up. The hit to affordability that comes with higher rates and higher home prices could let some steam out of the market It's never a good idea to overprice your home, but I would be especially wary of overpricing as seasonal cooling trends persist and rising rates take some affordability out of the homebuying equation."
Still, homes are selling faster than ever; 46% of homes that went under contract had accepted an offer within the first two weeks on the market, above the 43% rate a year earlier. Also, 33% of homes that went under contract had an accepted offer within one week of hitting the market, up from 31% during the same period a year earlier.
The average sale-to-list price ratio, which measures how close homes are selling to their asking prices, decreased to 101%. In other words, the average home sold for 1% above its asking price.
In other mortgage news, purchase applications decreased 1% week over week (seasonally adjusted) during the week ending September 24. For the week ending on September 23, 30-year mortgage rates were up slightly at 2.88%.
