New listings of homes for sale fell 15% year over year in the four weeks ending Aug. 21, marking the largest annual decline since the start of the pandemic, according to a new report from Redfin.
As a result, the supply of for-sale homes fell 0.6% from the previous four-week period — a slight decline, but just the second such drop since February.
A decline in homeowners putting their homes up for sale is partly due to reduced demand and falling prices. Fewer buyers are in the market, which can be attributed to rising mortgage rates and economic uncertainty.
Redfin found that the median home sale price was $371,125, up 6% year over year. Prices have declined 6%, however, from the record high of $394,775 hit during the four-week period ending June 19. A year ago, they rose 0.6% during the same period.
For the week ending Aug. 25, 30-year mortgage rates rose to 5.55%. That’s down from a 2022 high of 5.81% but up from 3.22% at the start of the year. In addition, mortgage purchase applications were down 21% from a year earlier during the week ending Aug. 19, while the seasonally adjusted index was down 1% week over week.
Those still choosing to list their homes, however, are starting to price in line with lower demand, Redfin said. The median asking price of newly listed homes dropped 5% from the record high set in May, and sale prices dropped 6% from the record high set in June.
"Sellers are coming to terms with the fact that volatile mortgage rates have dampened demand. Some sellers are pricing lower, and some homeowners are staying put because they're nervous they won’t get a good offer or they're hesitant to give up their low mortgage rate," said Redfin Economics Research Lead Chen Zhao. "Because the number of homes for sale is no longer rising, buyers’ newfound bargaining power is reaching its limit.
"It’s worth noting." she added, "that early demand indicators — such as tours and requests for help from agents — are elevated from their June lows and remain steady. So there is a pool of interested buyers out there, but sellers need to price fairly to attract them. If more sellers and buyers find that middle ground on price, we could see sales strengthen a bit.”
Redfin found that fewer people searched for “homes for sale” on Google. Searches during the week ending Aug. 20 were down 16% from a year earlier, but up 12% from late May.
Other takeaways:
- Only two metro areas saw a year-over-year decline in their median home-sale price, both in the Bay Area: Oakland, Calif., where prices fell 0.5% to $937,500, and San Francisco, where prices were down 3.9% to $1,453,750.
- The median asking price of newly listed homes increased 10% year over year to $382,475. Asking prices are down 5% from the all-time high set during the four-week period ending May 22. Last year during the same period they were down just 0.4%.
- Pending home sales were down 17% year over year.
- Active listings (the number of homes listed for sale at any point during the period) fell 0.6% from the prior four-week period, marking biggest decline since January 2022. On a year-over-year basis, they rose 4.3%.
