Redfin said the proportion of homes listed for sale that had their asking price cut hit an all-time high in the four weeks ended June 12, as buyer competition hit a 15-month low in May.
The seasonally adjusted Redfin Home Buyer Demand Index fell 14% year-over-year. ninth consecutive week. This followed a 12% drop in the week of June 5, a 9% drop in the week of May 29, and a 12% drop in the week of May 22.
But those trends aren’t stopping sellers from reaching the moon and getting it: The average asking price of newly listed homes rose 16% year-on-year to $409,251, while the average home sale price rose 14% to a record $399,806 per year. year. June 12 period.
“The housing market has not crashed, but it is hungover, coming down from an unsustainable high,” Redfin deputy chief economist Taylor Marr said in a press release.
On a weekly average, 5.6% of homes with price drops have set a record since Redfin began collecting this data in early 2015. A total of 22.4% of sellers reduced their asking price over the entire four-week period.
“Rate hikes this week will further stretch home buyers’ budgets to the point where many other homes could be marked down,” Marr said. “While many home sellers are already cutting their prices, more homeowners are likely to choose to stay put now that the mortgage rate on a new home is significantly higher than their current one.”
The monthly mortgage payment on the median asking price of a home has increased to $2,514. 5.78% Average flat rate over 30 years reported to Freddie Mac on June 16. That’s up 49% from $1,692 a year earlier, when mortgage rates were 2.93%.
All this reduces competition in the market.
A separate report said that in May, 57.8% of Redfin agent-written home listings were matched against at least one other bidder, the lowest level since February 2021 (seasonally adjusted) and the fourth straight monthly decline.
This is below the revised 60.9% in April and the pandemic peak of 68.8% during the pandemic. may 2021.
A typical home in a bidding war received 5.3 offers in May, up from 6.8 in April and 7.4 in May 2021.
Competition is expected to decline through the rest of 2022, with bid wars falling below 50% by the end of the year, Redfin economists predict.
Meanwhile, the beginning of the home buying season is not as strong as in the past. While home sales closings in May were up 5.8% from April, they were down 8.5% from May 2021, the Remax report noted.
The change between April and May was about half the average increase in May in the pre-pandemic years between 2015 and 2019.
May ended with 16.3% more homes for sale than in April, marking the second straight month in which the number of homes for sale rose. And it was the first month of 2022 that saw a year-over-year increase of 2.2% compared to May 2021.
But this only slightly changed the stock index: up to 0.9 months in May from 0.8 months in April. A year ago, the stock was at the level of 1 month.
The May average selling price of $430,000 according to Remax data is up 1.2% from $425,000 in April and 13.2% higher than $380,000 in May 2021.
“The decline in home sales isn’t entirely unexpected given higher mortgage rates, but the rise in inventories is welcome news for buyers who are now starting to see a few more listings hitting the market while looking for a home.” – Nick Bailey , President and CEO of Remax, according to a press release. “Affordability remains an issue, but homebuyers are regaining some control that is long overdue.”