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Redfin: Homebuying Conditions Improving As Rates Decline

Aug 06, 2021
Today’s homebuyers are eager to use online platforms for their mortgage applications, but many acknowledge the digital process is not without complications

Says 5-Month Streak of Record Prices Is Over, Supply Inching Up

KEY TAKEAWAYS
  • Median home-sale price rose 18% year over year to $362,750 but dipped 0.2% in the 4-week period ending July 25.
  • Asking prices of newly listed homes were up 12% year over year, but down 1% during the 4-week period.

At $362,750, the median home-sale price did not set a new record high for the first time since early March, according to a new report released today by Redfin, the technology-powered real estate brokerage. While that price was up 18% from a year earlier, it dipped slightly (-0.2%) from the four-week period ending July 25.

The report uses data from more than 400 U.S. metro areas, and covers the four-week period ending August 1. 

Some key points from the report;

  • The median home-sale price decrease from the four-week period ending July 25 ended a five-month streak of record-setting home prices.
  • Asking prices of newly listed homes were up 12% from the same time a year ago to a median of $358,475, but down 1% from their all-time high posted during the four weeks ending June 27.
  • Pending home sales were up 3%, the smallest year-over-year increase since the four-week period ending June 28, 2020. They were down 3% from the four weeks ending July 25 and down 12% from their 2021 peak hit during the four-week period ending May 30.
  • Active listings (the number of homes listed for sale at any point during the period) fell 26% from the same period in 2020—the smallest decline since the four-week period ending December 27, 2020. Active listings were up 13% from their 2021 low hit during the four-week period ending March 7.
  • The average sale-to-list price ratio, which measures how close homes are selling to their asking prices, fell to 102.1%—still only slightly below the 102.3% peak set in the four weeks ending July 4. In other words, the average home sold for 2.1% above its asking price. This measure was 3.1 percentage points higher than a year earlier.

Redfin said trends for home prices, sales, and new listings are starting to resemble the patterns it typically expects for this time of year, which is news after a year of unpredictable and insatiable demand for homes. Measures of competition and home-selling speed are plateauing — at 54% of homes selling above list price and about half under contract within two weeks —a s pending sales slide and new listings climb.

Mortgage rates are back below 2.8%, a level Redfin said it hasn't seen since the winter. If these trends continue, homebuying conditions will likely improve (relative to earlier in the summer), with more options and less competition for homebuyers.

"Although homes are much pricier than they were before the pandemic, homebuyers now have the benefit of very low mortgage rates and a little less competition than they faced earlier in the summer," said Redfin Chief Economist Daryl Fairweather.

To view the full report, including charts and methodology, click here.

About the author
David Krechevsky was an editor at NMP.
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