Heavy competition in the housing market continues to drive home prices up, but home tours, offers and pending sales have slowed, according to a new report from Redfin. New listings, a key lever for home sales growth, have held up better than pending sales and are inching up increasingly close to 2019 levels, according to the report. The company's Homebuyer Demand Index dropped 14% from its peak which happened to be 9 weeks prior.
“Offers no longer pour in the day a home hits the market,” said Phoenix Redfin real estate agent John Biddle. “It has become more common for offers to come in at least a few days after a home is listed for sale. If this were three years ago, we'd marvel at how fast the market was, but it's a clear slowdown from a few weeks ago. Now that things are opening up again and the summer is almost here, people have other priorities, like going on vacation. Plus, many homebuyers are frustrated and tired of competing, so they've stepped back—for now at least.”
According to Redfin, active listings fell 35% from 2020 and have been relatively flat since late February. Additionally, new listings of homes for sale were up 9% from a year earlier, have essentially been flat since early May and are now 3% below pre-pandemic 2019 levels.
“Many measures of the housing market, such as pending home sales, mortgage applications and touring activity, showed some improvement this past week following the Memorial Day slump, but don't call it a comeback,” said Redfin lead economist Taylor Marr. “Seasonally adjusted homebuyer demand is unlikely to rebound to the levels we saw earlier in the spring. While some buyers will find reprieve in less intense bidding wars this summer, others may be disappointed that homes remain hard to find.”
The report also states that 56% of homes that went under contract had an accepted offer within the first two weeks on the market, well above the 43% rate during the same period a year ago, but down 0.9 percentage points from the high point of the year, set during the four-week period ending March 28.
Learn more about how home prices are continuing to affect homebuyer demand.
