With the latest indices indicating a deceleration of home price appreciation through the spring homebuying season, and annualized price gains slowing for the fifth consecutive month in May, a new report from Redfin indicates the typical U.S. home that sold during the four weeks ending June 23 did so for 0.3% less than its asking price.
This marks the first time the typical home has sold under list price this time of year since the onset of the pandemic in 2020. The typical home sold for exactly its list price one year ago, and roughly 2% above its list price two years ago.
“Some buyers think they can get a deal because they’re hearing the market is cool, and some sellers think every home will sell for top dollar no matter the condition,” said Marije Kruythoff, a Los Angeles Redfin Premier agent. “In reality, everything depends on the house and the location.”
Fannie Mae's latest Home Purchase Sentiment Index, published in early June during the sales period studied by Redfin, indicated that prospective homebuyers are growing increasingly pessimistic, with just 14% of consumers saying that it was a good time to buy a home.
Slowing price gains would suggest that a lack of affordable housing inventory is gradually nudging market dynamics in favor of buyers, as is occurring in Florida and Texas, where listings are on the rise, but sales slow to come by.
Redfin’s analysis suggests that affordability constraints and persistently high temperatures across large swaths of the U.S. have depressed prospective buyers’ enthusiasm to see homes.
“I’ve heard some clients say, ‘it’s so hot outside I don’t want to see anything,’” said Joe Hunt, a Redfin manager in Phoenix. “But if mortgage rates were lower, I doubt heat would be keeping buyers away.”
Redfin data show the median home-sale price is up 4.9% year over year to an all-time high of $397,250. While mortgage rates have receded from May’s six-month high, the weekly average remains near 7%. The hottest properties in Kruythoff’s area are either move-in ready or complete fixer-uppers. “The homes in between,” she says, “those that are pretty nice but not updated, are sitting on the market longest.
Of the 50 most populous U.S. metros that Redfin tracks, for the four weeks ending June 23, new listings increased the most in San Jose (+40.6%), Miami (+22.4%), San Diego (+20.8%), Anaheim (+19.3%), and Phoenix (+19.2%).
Meanwhile, pending home sales declined the most in Houston (-15.1%), West Palm Beach (-14.9%), Atlanta (-12.2%), San Antonio (-11.4%), and Miami (-11.2%).
