Le Lézard
Classified in: Science and technology
Subject: Economic News/Analysis

Homes Are Selling for Near-Record Highs as Supply Falls to New Low, Demand Picks Up


(NASDAQ: RDFN) ? A record low number of homes for sale combined with an uptick in homebuyer demand propped up housing prices in June, even as elevated mortgage rates kept many buyers on the sidelines. That's according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. The median U.S. home sale price was $426,056 in June, just 1.5% ($6,341) below the all-time high of $432,397 set in May 2022.

June's median sale price was down 0.6% from a year earlier?the smallest decline of the past five months?and the average home sold for more than its list price for the first time in roughly a year.

"Today's housing market is extraordinary; it feels hot even though there are very few homes changing hands," said Redfin Chief Economist Daryl Fairweather. "Sellers are getting multiple offers if their home is priced well and in a desirable area even though there aren't a lot of buyers out there. That's because house hunters have so few homes to choose from. More buyers are starting to come out of the woodwork as they get used to elevated mortgage rates, which is making the market feel even hotter."

While mortgage rates are expected to start gradually declining in response to cooling inflation, they're unlikely to fall enough to bring a critical mass of sellers back to the market anytime soon, meaning housing supply should remain low. When rates do ultimately fall more significantly, prices will likely jump as more buyers move off of the sidelines.

Home Prices Climb Relatively Quickly in Affordable Markets

Affordable areas are seeing home prices climb relatively quickly. In Rochester, NY, the median sale price rose 13.1% year over year to $250,000?the biggest increase among the metros Redfin analyzed. It was followed by Milwaukee (11.6%) and Omaha, NE (10.4%).

"We haven't really felt the effects of high mortgage rates on homebuyer demand in Rochester," said local Redfin real estate agent Kimberly Hogue. "You can still find a nice house in a desirable part of town for $300,000 or less, and a lot of people here can afford the monthly payment for a home in that price range. Of course, those homes tend to sell for tens of thousands of dollars above the asking price. There are plenty of remote workers moving in, and lately I've helped several locals move farther out for more acreage."

Hogue continued: "I recently had a rural listing get more than 20 offers. One of the bidders offered to send the sellers on a cruise, but the sellers didn't bite. Instead, they went with an offer that was $100,000 over the asking price."

Prices fell most in Boise, ID (-10.4%), Austin, TX (-7.8%) and Las Vegas (-7.8%)?pandemic boomtowns that saw prices surge as scores of remote workers moved in.

Pending Home Sales Post Biggest Monthly Increase Since 2021

Seasonally-adjusted pending home sales rose 1.9% from a month earlier in June to the highest level since fall, representing the largest monthly increase since October 2021. Pending sales have now climbed for three consecutive months on a revised basis following 16 straight months of declines. Pending sales fell 16.2% year over year in June, the smallest annual decline in a year. Still, pending sales in June were lower than they were at any point during the three years leading up to the pandemic.

"Homebuyer demand has bottomed out," Fairweather said. "High rates are still giving a lot of buyers pause, but the sticker shock is no longer as severe as it was when rates skyrocketed last year. With home prices back near record highs, buyers are also less worried that they'll buy a house that'll plunge in value."

Closed home sales dropped 19.8% year over year to the lowest level since May 2020, and fell 3% month over month on a seasonally adjusted basis.

Lack of Homes for Sale Is Fueling Bidding Wars in Some Markets

The total number of homes for sale dropped 15% year over year to an all-time low in June, the biggest annual decline in nearly two years. New listings fell 30.6% from a year earlier to roughly 450,000?the lowest level and largest annual decline on record aside from April 2020, when the onset of the pandemic brought the housing market to a halt.

Months of supply stood at just 1.8?the lowest level for any June on record prior to the pandemic.

Homeowners are staying put because for a majority of them, selling and buying a new house would mean taking on a much higher mortgage rate. Roughly nine in 10 homeowners with mortgages have an interest rate below 6%. The average 30-year-fixed mortgage rate in June was 6.71%, not far from the 20-year-high of 7.08% hit in the fall.

The lack of homes on the market is fueling homebuyer bidding wars in some areas. Nearly half (46.8%) of home offers written by Redfin agents in June faced competition. While that's down from 51.8% a year earlier and a peak of 70.4% in January 2022, it's notable that so many buyers are facing competition at a time when demand is sluggish.

Competition varies widely from market to market. In Rochester, NY, the typical home is selling for 14.1% more than its asking price?the highest premium among the metros Redfin analyzed. But in Austin, TX, the typical home is selling for 2.1% less than its asking price.

June 2023 Highlights

 

June 2023

Month-Over-Month Change

Year-Over-Year Change

Median sale price

$426,056

1.9%

-0.6%

Pending sales, seasonally adjusted

396,468

1.9%

-16.2%

Homes sold, seasonally adjusted

404,331

-3.0%

-19.8%

New listings, seasonally adjusted

450,350

-3.5%

-30.6%

All homes for sale, seasonally adjusted (active listings)

1,318,154

-4.7%

-15.0%

Months of supply

1.8

0

0

Median days on market

29

-2

11

Share of for-sale homes with a price drop

15.9%

1.9 ppts

-0.02 ppts

Share of homes sold above final list price

39.7%

2.2 ppts

-15.5 ppts

Average sale-to-final-list-price ratio

100.3%

0.3 ppts

-2.0 ppts

Share of home offers written by Redfin agents that faced competition, seasonally adjusted

46.8%

-1.7 ppts

-5.1 ppts

Pending sales that fell out of contract, as % of overall pending sales

15.7%

1.5 ppts

1.6 ppts

Share of homes sales in which seller offered concession to buyer

36.1%

-3.1 ppts

13.9 ppts

Average 30-year fixed mortgage rate

6.71%

0.28 ppts

1.19 ppts

Metro-Level Highlights: June 2023

To view the full report, including charts and additional metro-level data, please visit: https://www.redfin.com/news/housing-market-tracker-june-2023

About Redfin

Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, title insurance, and renovations services. We also run the country's #1 real estate brokerage site. Our home-buying customers see homes first with same day tours, and our lending and title services help them close quickly. Customers selling a home in certain markets can have our renovations crew fix up their home to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Customers who buy and sell with Redfin pay a 1% listing fee, subject to minimums, less than half of what brokerages commonly charge. Since launching in 2006, we've saved customers more than $1.5 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 5,000 people.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email [email protected]. To view Redfin's press center, click here.


These press releases may also interest you

at 07:55
Syra Health Corp. ("Syra Health" or the "Company"), a healthcare technology company powering better health by providing meaningful solutions, announced today that it has been awarded a $5.8 million contract to train professionals who deliver health...

at 07:54
Valmet's Half Year Financial Review January 1 ? June 30, 2024: Orders received remained at the previous year's level and amounted close to EUR 1.3 billion and Comparable EBITA decreased to EUR 141 million in the second quarter Valmet Oyj's stock...

at 07:51
Remote.It, a premier SaaS-based network connectivity management platform, today released its open source project to enable Raspberry Pi Bluetooth (BLE) WiFi Network Configuration. The new open source project allows a computer or mobile device to...

at 07:50
William Mills Agency, North America's largest independent public relations and marketing firm specializing in financial technology, has been selected by SRA Watchtower, a Glen Allen, Va.-based financial technology services firm, and the provider of...

at 07:45
NaaS Technology Inc. ("NaaS" or the "Company") , the first U.S. listed EV charging service company in China, today announced its unaudited financial results for the second quarter and six months ended June 30, 2024. Highlights for the Second Quarter...

at 07:45
Jacobs  was awarded the competitive Federal Bureau of Investigation (FBI) Information Technology Supplies and Support Services 2nd Generation (ITSSS-2) Blanket Purchase Agreement (BPA). This agreement, which will also be available to the broader...



News published on and distributed by: