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Redfin: Sellers’ Time On Market Doubles From Spring

Oct 20, 2022
Pending Home Sales October 2022

Home sales, listings continue to decline, leading to a record share of sellers dropping prices.

KEY TAKEAWAYS
  • For the four-week period ending Oct. 16, pending home sales fell 32% and new listings fell 19%, their biggest year-over-year drops since the start of the pandemic.
  • Homes that sold were on the market for a median of 34 days, up more than a full week from 26 days a year earlier and the record low of 17 days set in May and early June.
  • 7.9% of homes had a price drop, up from 3.9% a year earlier.

The U.S. housing market has fewer new listings as fewer homes sell and those for sale spend more time on the market, according to a new report from Redfin.

For the four-week period ending Oct. 16, pending home sales fell 32% and new listings fell 19%, their biggest year-over-year drops since the start of the pandemic. Both metrics fell to levels about on par with April 2020, Redfin said.

U.S housing market activity is continuing to slow as mortgage rates sit at a 20-year high, the technology-powered real estate brokerage said Thursday. The Mortgage Bankers Association said this week that mortgage-purchase applications fell to their lowest level in 25 years.

Sales are dropping even more than listings, Redfin said. Sellers are still catching on to the prices buyers in the market are willing and able to pay in the face of near-7% mortgage rates. As a result, homes are taking twice as long to sell as they did in the spring. 

Homes that sold were on the market for a median of 34 days, up more than a full week from 26 days a year earlier and the record low of 17 days set in May and early June. The typical time on market has steadily increased since June. 

That’s leading to a record share of sellers dropping their asking prices — 7.9% of homes had a price drop, up from 3.9% a year earlier — and the typical home is selling for 1% less than its final asking price, the biggest discount since August 2020.

“With rates sitting above 6.5% for three weeks and no indication they’ll come down before the end of the year, people are only buying and selling homes if they need to,” said Redfin Economics Research Lead Chen Zhao. “Prospective buyers are waiting for prices and/or mortgage rates to come down, and sellers want to squeeze as much money out of their sale as possible.”

Zhao said homes will sell eventually, “but it may take a few months, and sellers need to meet buyers where they are. That means lower prices and negotiations, including things like giving buyers a credit to buy down their mortgage rate and paying for home repairs. Prospective sellers may also consider renting out their home for a few months until demand recovers.”

Buyers, Zhao added, “should keep similar things in mind when they’re doing the math of which homes they can afford. Try negotiating down the sale price; now’s the time to make what would have been considered a lowball offer six months ago. Ask for concessions and repairs to make up for high mortgage rates.”

Leading indicators of homebuying activity:

  • For the week ended Oct. 20, 30-year mortgage rates rose to 6.94%, up slightly from last week and a 20-year high.
  • Fewer people searched for “homes for sale” on Google. Searches during the week ended Oct,. 15 were down 32% from a year earlier.
  • The seasonally adjusted Redfin Homebuyer Demand Index — a measure of requests for home tours and other home-buying services from Redfin agents — was down 31% year over year to its lowest level since May 2020.
  • Touring activity as of Oct. 16 was down 25% from the start of the year, compared to an 8% increase at the same time last year, according to home tour technology company ShowingTime.
  • Mortgage purchase applications were down 4.5% week over week (seasonally adjusted) to their lowest level since 1997 during the week ended Oct. 14. They were down 38% from a year earlier.

Key housing market takeaways for 400+ U.S. metro areas:

Unless otherwise noted, this data covers the four-week period ending Oct. 16. Redfin’s weekly housing market data goes back through 2015.

  • The median home sale price was $367,083, up 6% year over year and on par with the previous week.
  • Home-sale prices fell from a year earlier in three U.S. metro areas. Prices declined 4% year over year in Oakland, 2% in San Francisco, and 1% in Philadelphia.
  • The median asking price of newly listed homes increased 8% year over year to $378,225.
  • The monthly mortgage payment on the median asking price home climbed to a near-record high of $2,552 at the current 6.94% mortgage rate, up 50% from $1,704 a year earlier, when mortgage rates were 3.01%, and up from a recent low of $2,203 during the four-week period ending Aug. 14.
  • Pending home sales were down 32% year over year, the largest decline since April 2020.
  • New listings of homes for sale were down 19% from a year earlier, the biggest decline since May 2020.
  • Active listings (the number of homes listed for sale at any point during the period) fell 1% from the prior four-week period. On a year-over-year basis, they rose 5%.
  • Months of supply — a measure of the balance between supply and demand, calculated by dividing the number of active listings by closed sales — rose to 3.1 months, the highest level since June 2020.
  • 35% of homes that went under contract had an accepted offer within the first two weeks on the market, a small change from the prior four-week period but down from 39% a year earlier.
  • 23% of homes that went under contract had an accepted offer within one week of hitting the market, a small change from the prior four-week period but down from 28% a year earlier.
  • Homes that sold were on the market for a median of 34 days, up more than a full week from 26 days a year earlier and the record low of 17 days set in May and early June. Typical time on market has steadily increased since June.
  • 30% of homes sold above final list price, down from 44% a year earlier and the lowest level since August 2020.
  • On average, a record high 7.9% of homes for sale each week had a price drop, up from 3.9% a year earlier.
  • The average sale-to-final-list price ratio, which measures how close homes are selling to their asking prices, fell to 98.9% from 100.5% a year earlier. That’s the lowest level since August 2020.
About the author
David Krechevsky was an editor at NMP.
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