Key signs point to a cooling housing market, according to a new report from Redfin, the technology-powered real estate brokerage.
According to data collected over the four-week period ending July 25, pending home sales posted a 7 percent year-over-year increase, the smallest since late June 2020. The supply of homes for sale continued to plateau as the number of newly listed homes for sale followed its slow seasonal decline.
Home sale prices — a lagging indicator and a notable exception to the cooling trend — continued to increase, rising 19% year over year. Homebuying competition passed its peak; the majority of homes still find buyers within two weeks and sell for above the asking price. Some buyers waiting for prices to cool have grown weary, with online home searches, in-person tours, and mortgage applications all declining.
Other key takeaways from the report, which covers more than 400 U.S. metro areas and is based on homes listed and/or sold during the period:
- New listings of homes for sale were flat from a year earlier. The number of homes being listed is following a largely seasonal decline — down 10% from the 2021 peak during the four-week period ending May 23 — albeit slower than the 14% decline during the same period in 2019.
- The median home-sale price increased 19% year over year to $364,250, a record high
- Active listings (the number of homes listed for sale at any point during the period) fell 27% from the same period in 2020 — the smallest decline since the four-week period ending January 3. Active listings were up 12% from their 2021 low during the four-week period ending March 7 but have remained largely flat since late June.
- Mortgage purchase applications during the week ending July 23 fell 2% week over week (seasonally adjusted) to their lowest level since May 2020. For the week ending July 29, 30-year mortgage rates averaged 2.80%.
"Home sellers are increasingly having to lower their expectations," said Redfin Chief Economist Daryl Fairweather. "Many homebuyers have turned to the rental market amid such high home prices, but now with rental prices growing, I expect many will return to the housing market by spring of next year.”
To view the full report, including charts and methodology, please visit: https://www.redfin.com/news/housing-market-pending-sales-smallest-increase
