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Redfin: Buyers Can Start To Take Their Time

Sarah Wolak
Jul 22, 2022
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Report says homes are taking longer to sell, as few are being listed and even fewer are selling.

KEY TAKEAWAYS
  • Pending home sales fell more than they have since May 2020, and the total number of homes for sale posted its biggest increase since August 2019.
  • For the week ending July 21, 30-year mortgage rates rose to 5.54%, which was down from a 2022 high of 5.81%.
  • Mortgage purchase applications were down 19% from a year earlier during the week ending July 15 to the lowest level since April of 2020.

The typical home sold during the four weeks ending July 17 spent 19 days on the market, one day longer than last year, according to a report from Redfin

This marks the first time in two years that the median time on market has posted a year-over-year gain. Pending home sales fell more than they have since May 2020, and the total number of homes for sale posted its biggest increase since August 2019, despite fewer homes hitting the market than this time last year. 

Redfin also said home sale prices continued to fall, down another 0.6% from the four-week period ending July 10.

"Buyers, who earlier this year had to race to beat the competition, can now take their time touring homes and perhaps even wait to see if sellers drop the price," said Daryl Fairweather, Redfin’s chief economist. "Still, few homes are being listed, so if your dream house hits the market, you should negotiate hard, now that you have the power to. The value may fall in the near term, but if you plan to live there for five or 10 years you will almost certainly gain home equity over that horizon. Sellers, on the other hand, may want to list sooner rather than later, before prices fall more.”

Redfin also reported some indicators of homebuying activity:

  • For the week ending July 21, 30-year mortgage rates rose to 5.54%. This was down from a 2022 high of 5.81%, but dramatically up from 3.11% at the start of the year.
  • The seasonally adjusted Redfin Homebuyer Demand Index, a measure of requests for home tours and other home-buying services from Redfin agents, was down 17% year over year during the week ending July 17.

Disinterest in home buying was a key finding in Redfin’s report, as fewer people searched for “homes for sale” on Google. Year over year, searches during the week ending July 16 were down 23%. Pending home sales were down 15% year over year, the largest decline since May 2020.

Touring activity as of July 10 also slowed, down 2% from the start of the year, compared to a 22% increase at the same time last year, according to home tour technology company ShowingTime.

Mortgage purchase applications were down 19% from a year earlier during the week ending July 15 to the lowest level since April of 2020, while the seasonally adjusted index was down 7% week over week.

Other market takeaways indicated that although median home prices and asking prices remain high, prices are climbing down from their peaks. The median home sale price was up 11% year over year to $389,200. This was down 1.7% from the peak during the four-week period ending June 19. A year ago the median price rose 0.9% during the same period. The year-over-year growth rate was down from the March peak of 16%.

The monthly mortgage payment on the median asking price home hit $2,389 at the current 5.54% mortgage rate, up 45% from $1,650 a year earlier, when mortgage rates were 2.78%. That’s down slightly from the peak of $2,486 reached during the four weeks ending June 12.

Prices continued to seesaw, with 49% of homes selling above list prices, down from 54% a year earlier. On average, 7.3% of homes for sale each week had a price drop, a record high as far back as the data goes, through the beginning of 2015. Redfin says that the average home sold for 1.4% above its asking price during this period. 

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