Home sales dropped 19.3% year over year in July to their lowest level since the beginning of the COVID-19 pandemic, making for the biggest annual decline in U.S. home sales, real estate firm Redfin reported today.
Redfin also says home prices increased at their slowest pace since June 2020, rising 7.7%. The slowing price growth is due to months of slumping homebuyer demand, with homes sitting on the market longer than before, it said.
While most sellers hesitated to sell for less than what they would have gotten at the height of the pandemic homebuying frenzy, 21% of them dropped their asking price in July, the highest share since at least 2012, Redfin said. Also causing a tightening in the home-buying market, Redfin says, is that many homeowners are staying put because they have a low mortgage rate compared to today’s rates.
Bankrate reports that the average 30-year, fixed-mortgage rate is 5.78%, up 25 basis points over the last week.
New listings, Redfin says, dropped 13.5%, the biggest decline in over a year.
“The buyers who are still in the game are finally getting a break from bidding wars, which means they can be picky,” said Pam Lewis, a Redfin agent in Raleigh, N.C. “Three months ago, buyers were saying, ‘Get me a building with four walls and I’ll make it work.’ Now they have some choices.
"They don’t want a home if it doesn’t have the fenced-in yard or guest room on their wish list, and they want a $20,000 price reduction if a home has been on the market for more than a week," Lewis continued. "I’m telling buyers they’re not likely to see their property values decrease over time, but they may not appreciate as fast as homeowners have become accustomed to in the past few years.”
Redfin also reports the following:
- Indianapolis was the fastest growing market, with half of all homes listed as pending to be sold in just five days, the same as last year. Oklahoma City was the next fastest market, with homes on the market for seven days before having an offer.
- The most competitive market in July was Rochester, N.Y., where 78.1% of homes sold above list price, followed by Buffalo, N.Y., with 70.9% of homes selling above list price, and Newark, N.J., with 70.6% of homes selling above list price.
- Cape Coral, Fla., had the nation’s highest price growth, rising 27% since last year to $399,900. Two other Florida communities, Tampa and North Port, came in second and third, with 24.5% and 24% price growth, respectively, year over year.
