Redfin reports demand slips, pushing more sellers to drop supply prices

SEATTLE – (BUSINESS WIRE) – (NASDAQ: RDFN) – Demand for home buying in the early stages continues to falter this spring as new ads fell 7% from a year earlier, according to a new report from Redfin (redfin.com), the technology-driven real estate business. At the same time, the average 30-year fixed mortgage rate rose to 5% and the median price rose to $ 397,747, sending the typical homebuyer’s monthly payment up 35% year-over-year to a record high of $ 2,288.

Here are the key early indicators that show that demand is declining at a time of year when it typically occurs:

  • Fewer people searched for “houses for sale” on Google – searches in the week ending April 9 fell 3% from a year earlier.

  • The seasonally adjusted Redfin Homebuyer Demand Index – a measure of requests for home trips and other home buying services from Redfin agents – has fallen 3% over the past four weeks compared to a 5% increase over the same period last year. The index rose 2% compared to the previous year.

  • Touring activity from the first week of January to April 10 was 23 percentage points behind in the same period in 2021, according to Home Tour technology company ShowingTime.

  • Mortgage applications fell 6% year-over-year, while the seasonally adjusted index rose 1% week-on-week in the week ending April 8.

  • In the week ending April 14, 30-year mortgage rates rose to 5% – the highest level since February 2011. This was an increase from 4.72% the week before, and the fastest rise in three months since May 1994.

Redfin is also closely following the accelerating share of home listings with falling prices, which are rising at its fastest spring pace since at least 2015, another sign that demand does not live up to sellers’ expectations.

“There really is a limit to homebuyer demand, even though the market over the last few years has made it seem endless,” said Redfin chief economist Daryl Fairweather. “The sharp rise in mortgage rates is pushing more home buyers out of the market, but it also appears to be discouraging some homeowners from selling. “When both demand and supply fall, it is unlikely that the market will change from a seller’s market to a buyer’s market in the near future.”

Despite these early signs that the market is declining, it still feels as hot as ever for home buyers, with new records for home sales rates and price increases based on data dating back to 2015. Forty-five percent of homes went under contract found a buyer within a week and the average home sold went 2.4% above the offer price.

“If a home is on the market for more than a week, people are starting to wonder why or assume there is something wrong with it,” said Redfin Boston real estate agent James Gulden. “Every offer I’ve written recently has met with several offers, but some people have finally had enough of all the competition and are withdrawing. They are becoming less willing to make a risky offer in a highly stressed bidding war situation.”

Key housing takeaways for more than 400 U.S. metropolitan areas:

Unless otherwise indicated, this data covers the four weeks ending April 10th. Redfin’s weekly housing market data goes back through 2015.

  • The average home sales price rose 17% year-over-year to a record high of $ 389,178.

  • The median price of newly built homes rose 14% year-on-year to $ 397,747.

  • The monthly mortgage repayments on the median asking price housing rose to a record high of $ 2,288 at the current 5% mortgage rate. This was an increase of 35% from a year earlier, when mortgage rates were 3.04%.

  • Sales of waiting homes increased by 1% year over year.

  • New listings of homes for sale fell 7% from a year earlier, the 21st annual fall in a row.

  • Active ads (the number of homes listed for sale at any one time during the period) decreased 23% year over year.

  • 58% of homes that went under contract had an accepted offer within the first two weeks on the market, a record high level. This was an increase compared to 55% the year before.

  • 44% of homes that went under contract had an accepted offer within a week after hitting the market, a record high. This is an increase from 41% in the same period last year.

  • Homes sold were on the market in a median of 18 days, down from 26 days a year earlier.

  • 54% of homes sold above list price, an increase from 42% a year earlier, and just reluctant with the record high seen in July 2021.

  • On average, 3.2% of homes for sale each week had a price drop, with 13% falling their price over the past four weeks. This is an increase from 10% a month earlier and 9% a year ago. The share of homes with price declines is rising faster during this time of year than they have been since at least 2015. Typically at this time of year, the share of homes with price declines is slightly lower month by month.

  • The average sales-to-list price ratio, which measures how close homes sell at their offer prices, rose to a record high of 102.4%. In other words, the average home sold for 2.4% above the offer price. This was an increase from 100.4% in 2021.

To view the full report, including charts and methodology, please visit: https://www.redfin.com/news/housing-market-update-demand-slips-more-price-drops/

About Redfin

Redfin (www.redfin.com) is a technology-driven real estate company. We help people find a place to live with real estate, instant housing (iBuying), rental, lending, property insurance and renovation services. We sell homes for more money and take half of the fee. We also run the country’s # 1 real estate site. Our home-buying customers look home first with on-demand tours, and our lending and title service helps them close quickly. Customers selling a home can take an instant cash offer from Redfin or have our renovation staff arrange their home to sell for a high dollar. Our rental business gives millions across the country the opportunity to find apartments and houses for rent. Since its launch in 2006, we have been saving customers more than $ 1 billion in commissions. We serve more than 100 markets across the United States and Canada and employ over 6,000 people.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. Visit the Redfin Data Center to learn about housing market trends and download data. To be added to Redfin’s press release distribution list, send an email to press@redfin.com. To see Redfin’s press center, click here.

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