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Global Uncertainty Spiking Housing Prices, Lowering Interest Rates

Steve Goode
Mar 04, 2022
Redfin has announced the expansion of its Redfin Concierge service to home sellers in the Seattle metro area

Home prices soared to an all-time high of $363,975 as the market continued to heat up during the four-week period ending Feb. 27.

KEY TAKEAWAYS
  • Record setting home prices
  • Falling interest rates
  • Global uncertainty

The escalating conflict in Ukraine is being seen by some housing analysts as a partial cause for record-setting home prices and falling interest rates.

According to a new report from Redfin, a technology-powered real estate brokerage, the price of a new home soared to an all-time high of $363,975 as the market continued to heat up during the four-week period ending Feb. 27.

“The war in Ukraine has rattled the global economy, causing mortgage rates to fall after weeks of increases,” said Redfin Deputy Chief Economist Taylor Marr. “The dip in mortgage rates should buoy homebuying demand temporarily, fueling continued price gains. But demand may drop off if the Federal Reserve raises interest rates again as expected.” 

According to Redfin, The median home-sale price was up 16% year over year, the biggest annual gain since August. The typical home sold for 0.8% above list price, the largest premium since October. Intense competition among buyers driven by an extreme shortage of homes for sale is driving prices up unseasonably fast, the report said.

The median asking price of newly listed homes also increased 15% year over year to an all-time high of $390,488, and rose 27% from the same time in 2020, while the the monthly mortgage payment on the median asking price home fell slightly to $2,018 at the current 3.76% mortgage rate. The monthly payment was up 23% from a year earlier, when mortgage rates were 3.02%, and up 36% from the same period in 2020, when rates were 3.29%, the report said.

Other records noted in the four-week period that was analyzed were:

  • That an all-time high of 58% of homes that went under contract had an accepted offer within the first two weeks on the market;
  • That an all-time high of 45% of homes that went under contract had an accepted offer within one week of hitting the market; and
  • That active listings (the number of homes listed for sale at any point during the period) fell 24% year over year, dropping to an all-time low of 456,000.
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