SEATTLE–(BUSINESS WIRE)–(NASDAQ: RDFN) – Demand for early-stage homebuying continues to weaken this spring, according to a new report from Redfin (redfin.com) as new listings fell 7% year-on-year are technology-based real estate brokerage. At the same time, the average 30-year fixed-rate mortgage rate rose to 5% and the average asking price climbed to $397,747, pushing a homebuyer’s typical monthly payment up 35% year over year to an all-time high of $2,288.
Here are the top leading indicators that show demand is falling at a time of year when it normally rises:
Fewer people searched for “homes for sale” on Google – searches for the week ended April 9 were down 3% year-on-year.
The seasonally adjusted Redfin Homebuyer Demand Index — a measure of requests for home inspections and other home-buying services from Redfin agents — has declined 3% over the past four weeks, compared with a 5% increase in the same period last year. The index was up 2% year over year.
Tour activity from the first week of January to April 10 was 23 percentage points behind the same period in 2021, according to home tour technology company ShowingTime.
Mortgage purchase applications fell 6% year-on-year, while the seasonally adjusted index rose 1% week-on-week for the week ended April 8.
In the week ended April 14, 30-year mortgage rates rose to 5% – the highest since February 2011. This was up from 4.72% in the previous week and the fastest three-month rise since May 1994.
Redfin is also closely monitoring the increasing proportion of listings with prices falling, rising as fast as possible since at least 2015, another sign that demand is not meeting seller expectations.
“Demand from homebuyers is really limited, although the market has made it seem endless in recent years,” said Redfin chief economist Daryl Fairweather. “The sharp rise in mortgage rates is pushing more homebuyers out of the market, but it also appears to be discouraging some homeowners from selling. With both supply and demand easing, the market is unlikely to switch from a sellers’ market to a buyers’ market anytime soon.”
Despite these early signs that the market is slowing, things still feel as hot as ever for homebuyers, with new records for home sales speeds and price increases based on data going back to 2015. 45 percent of homes that went under The contract found a buyer within a week, and the average home sold sold 2.4 percent above asking price.
“Once a house’s been on the market for more than a week, people start to wonder why or assume there’s something wrong with it,” said James Gulden, real estate agent at Redfin Boston. “Every offer I’ve written lately has been offered multiple times, but some people are finally fed up with all the competition and are pulling out. They are less willing to make a risky bid in a very stressful bidding war situation.”
Major housing takeaways for over 400 U.S. metropolitan areas:
Unless otherwise stated, this includes data the four-week period ending on Oct. Redfin’s weekly housing market data dates back to 2015.
The median home selling price rose 17% year over year to a record high of $389,178.
The median asking price for newly listed homes increased 14% year over year to $397,747.
The monthly mortgage payment on the median asking price for a home rose to a record high of $2,288 at a current mortgage rate of 5%. This was a 35% increase from last year when mortgage rates were 3.04%.
Pending home sales were up 1% year over year.
New listings of homes for sale fell 7% year-over-year, the 21st consecutive annual decline.
Active listings (the number of properties for sale at any point during the period) declined 23% year over year.
58% of signed homes had an accepted offer within the first two weeks on the market, an all-time high. This was an increase from 55% in the previous year.
44% of signed homes had an accepted offer within a week of launch, an all-time high. This was an increase of 41% in the same period last year.
Houses sold were on the market for an average of 18 days, up from 26 days last year.
54% of homes sold above list price, up from 42% a year earlier, and just below the all-time high set in July 2021.
On average, 3.2% of homes for sale saw their price fall each week, with 13% lowering their price over the last four weeks. That’s up from 10% a month ago and 9% a year ago. The share of listings with price drops is increasing faster this time of year than it has been since at least 2015. Typically, the share of properties with price drops at this time of year is declining slightly month-on-month.
The average sell-to-list price ratio, which measures how close properties are selling to their asking price, rose to an all-time high of 102.4%. In other words, the average home sold for 2.4% above its asking price. This was an increase from 100.4% in 2021.
For the full report including charts and methodology go to: 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 housing with brokerage services, home purchase (iBuying), rental, lending, home insurance and renovation services. We sell houses for more money and charge half the fee. We also operate the country’s leading real estate agent website. Our home buying clients view homes first with on-demand tours, and our rental and ownership services help them close quickly. Clients selling a home can accept an instant cash offer from Redfin or have our home renovation team repair their home to sell for a top price. Our rental business enables millions of people across the country to find apartments and homes for rent. Since launching in 2006, we’ve saved our clients more than $1 billion in commissions. We serve more than 100 markets in the US and Canada and employ over 6,000 people.
For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn more about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin’s press release mailing list, email [email protected]. Click here to view Redfin’s press center.