Despite the fact that new listings are up 7.8% year over year, the median U.S. home sale price hit an all-time high of $394,000 during the four weeks ending June 9.
That’s 4.4% higher YOY – the biggest increase in about three months, according to a new report from Redfin. For now, high costs are keeping some prospective homebuyers on the sidelines.
Pending home sales are down 3.5% year over year, the biggest decline in three months, and Redfin’s Homebuyer Demand Index – a measure of requests for tours and other buying services from Redfin agents – is down 18%, its lowest level since February.
One encouraging sign for demand? Mortgage-purchase applications are up 9% week over week.
Also, asking prices have leveled off and are predicted to continue cooling. The declines are already apparent in four U.S. metros: Austin, Texas, Fort Worth, Texas, San Antonio, Texas and Portland, Ore.
On average, 6.5% of home sellers are cutting their asking price, the highest share since November 2022. Meanwhile, new listings are up 7.8% year over year, still below typical springtime levels.
Average mortgage rates dropped to their lowest level in three months June 12, following the release of the latest CPI report, which indicated inflation continues to cool. Mortgage rates are expected to decline further over the summer, which would keep monthly housing costs from spiraling up again. The Federal Reserve forecast just one interest-rate cut this year at the Open Market Committee’s June 12 meeting. However, Redfin analysts say it’s possible the Fed wasn’t able to factor in the new inflation data in time for the meeting and may revise this projection at their next meeting, July 30-31.
“The latest inflation report is good for homebuyers because it has already sent mortgage rates down, though this week’s Fed meeting will temper mortgage-rate declines,” said Chen Zhao, Redfin’s economic research lead. “But on the other side of the coin, if lower mortgage rates bring back more demand than supply, that could erase the possibility that home-price growth softens, and push prices up even further. Lower rates and higher prices may ultimately cancel each other out when it comes to homebuyers’ monthly payments.”
Median housing payments have fallen slightly since April despite record sale prices because weekly average mortgage rates have declined to 6.99%. The typical homebuyer’s monthly housing payment dipped to $2,829, which is $30 below April’s record high.
