High housing costs—and high temperatures—are
keeping prospective homebuyers on the sidelines, making it more
common for homes to sell below list price. This could be a sign
that home-price growth will lose momentum in the coming months.
(NASDAQ: RDFN) — The typical U.S. home that sold during the four
weeks ending June 23 sold for 0.3% less than its asking price,
according to a new report from Redfin (redfin.com), the
technology-powered real estate brokerage. This marks the first time
the typical home has sold under list price this time of year since
the onset of the pandemic in 2020, when the housing market nearly
ground to a halt. The typical home sold for exactly its list price
one year ago, and roughly 2% above its list price two years
ago.
Additionally, just under two-thirds (32.3%) of U.S. homes sold
over asking price during that period. That’s the lowest share of
any June since 2020, and down from 36% a year earlier. Nearly 7% of
home sellers dropped their asking price, on average, the highest
level since November 2022 and up from 4.7% a year ago.
The likelihood of homes selling below asking price is rising
because there’s more supply than demand, at least for certain types
of homes in certain parts of the country. New listings are up 8.2%
year over year nationwide, while pending home sales are down 4.3%,
the biggest decline in four months. Most inventory is growing
stale; over 60% of homes are listed for at least a month without
going under contract.
Buyers are shying away due to sky-high housing costs. The
median home-sale price is up 4.9% year over year to an all-time
high of $397,250. While mortgage rates have come down from May’s
six-month high, the weekly average is still near 7%. The typical
homebuyer’s monthly payment is $2,785, just about $50 below the
record high.
Record-breaking heat is another reason some buyers have taken
a backseat recently. “I’ve heard some clients say, ‘it’s so hot
outside I don’t want to see anything,’” said Joe Hunt, a Redfin
manager in Phoenix. “But if mortgage rates were lower, I doubt heat
would be keeping buyers away.”
Buyers may get a slight respite soon on costs soon. The
growing likelihood that homes sell below asking price, along with
the high share of sellers dropping their prices, could mean
sale-price growth loses momentum. Plus, mortgage rates may decrease
further if inflation continues to cool.
Redfin agents say both buyers and sellers should be realistic
about prices in today’s market. Sellers shouldn’t overprice,
and buyers should know they may be able to negotiate— but only if a
home has been on the market without much activity for at least a
few weeks.
“Some buyers think they can get a deal because they’re hearing
the market is cool, and some sellers think every home will sell for
top dollar no matter the condition,” said Marije Kruythoff, a Los
Angeles Redfin Premier agent. “In reality, everything depends on
the house and the location. The hottest properties in this area are
either move-in ready or complete fixer-uppers. The homes in
between, those that are pretty nice but not updated, are sitting on
the market longest. Sellers of that type of home often benefit from
making cosmetic repairs before listing, which we offer through
Redfin Concierge Service. And buyers who do encounter
middle-of-the-road listings without much wow factor should consider
trying to negotiate.”
For Redfin economists’ takes on the housing market, please visit
Redfin’s “From Our Economists” page.
Leading indicators
Indicators of homebuying demand and
activity
Value (if
applicable)
Recent change
Year-over-year
change
Source
Daily average 30-year
fixed mortgage rate
7.06% (June 26)
Up from a 3-month low of 6.97% a week
earlier, but down from a 5-month high of 7.52% 6 weeks earlier
Up from 6.91%
Mortgage News Daily
Weekly average 30-year
fixed mortgage rate
6.87% (week ending June 20)
Lowest level since week ending April 4
Up from 6.67%
Freddie Mac
Mortgage-purchase
applications (seasonally
adjusted)
Increased 1% from a week earlier (as of
week ending June 21)
Down 13%
Mortgage Bankers Association
Redfin Homebuyer
Demand Index
(seasonally adjusted)
Up 5% from a month earlier (as of week
ending June 23)
Down 14%
Redfin Homebuyer Demand Index, a measure
of requests for tours and other homebuying services from Redfin
agents
Touring activity
Up 27% from the start of the year (as of
June 23)
At this time last year, it was also up 15%
from the start of 2023
ShowingTime, a home touring technology
company
Google searches for
“home for sale”
Unchanged from a month earlier (as of June
24)
Down 15%
Google Trends
Key housing-market data
U.S. highlights: Four weeks ending June
23, 2024
Redfin’s national metrics include data
from 400+ U.S. metro areas, and is based on homes listed and/or
sold during the period. Weekly housing-market data goes back
through 2015. Subject to revision.
Four weeks ending June 23,
2024
Year-over-year change
Notes
Median sale
price
$397,250
4.9%
All-time high; biggest increase since
March
Median asking
price
$414,975
6.1%
Biggest increase since October 2022
Median monthly
mortgage
payment
$2,785 at a 6.87% mortgage
rate
7.5%
$54 below all-time high set during the 4
weeks ending April 28
Pending sales
85,246
-4.3%
Biggest decline in 4 months
New listings
100,545
8.2%
Biggest increase in 2 months
Active listings
953,300
16.9%
Months of
supply
3.3
+0.6 pts.
4 to 5 months of supply is considered
balanced, with a lower number indicating seller’s market
conditions
Share of homes
off market in
two weeks
41.4%
Down from 46%
Median days on
market
31
+4 days
Share of homes
sold above list
price
32.3%
Down from 36%
Share of homes
with a price drop
6.7%
+2 pts.
Highest level since November 2022
Average sale-to-
list price ratio
99.7%
-0.3 pts.
Metro-level highlights: Four weeks
ending June 23, 2024
Redfin’s metro-level data includes the 50
most populous U.S. metros. Select metros may be excluded from time
to time to ensure data accuracy.
Metros with biggest year-over-
year increases
Metros with biggest
year-over-year
decreases
Notes
Median sale price
Anaheim, CA (16%)
Nassau County, NY (14.4%)
New Brunswick, NJ (13.8%)
Newark, NJ (13.6%)
West Palm Beach, FL (12.7%)
San Antonio (-2.5%)
Austin, TX (-2.5%)
Dallas (-0.9%)
Fort Worth, TX (-0.8%)
Declined in 4 metros
Pending
sales
San Jose, CA (14.7%)
Pittsburgh (5%)
San Francisco (4.5%)
Anaheim, CA (3.4%)
Columbus, OH (2.7%)
Houston (-15.1%)
West Palm Beach, FL (-14.9%)
Atlanta (-12.2%)
San Antonio (-11.4%)
Miami (-11.2%)
Increased in 11 metros
New listings
San Jose, CA (40.6%)
Miami (22.4%)
San Diego (20.8%)
Anaheim, CA (19.3%)
Phoenix (19.2%)
Chicago (-7.6%)
Atlanta (-7.5%)
Detroit (-2%)
Minneapolis (-0.8%)
Portland, OR (-0.4%)
Declined in 5 metros
To view the full report, including charts, please visit:
https://www.redfin.com/news/housing-market-update-homes-selling-below-asking-price-june-2024
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 run
the country's #1 real estate brokerage site. Our customers can save
thousands in fees while working with a top agent. Our home-buying
customers see homes first with on-demand tours, and our lending and
title services help them close quickly. Customers selling a home
can have our renovations crew fix it up to sell for top dollar. Our
rentals business empowers millions nationwide to find apartments
and houses for rent. Since launching in 2006, we've saved customers
more than $1.6 billion in commissions. We serve more than 100
markets across the U.S. and Canada and employ over 4,000
people.
Redfin’s subsidiaries and affiliated brands include: Bay Equity
Home Loans®, Rent.™, Apartment Guide®, Title Forward® and
WalkScore®.
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 press@redfin.com.
To view Redfin's press center, click here.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240627936271/en/
Redfin Journalist Services: Kenneth Applewhaite
press@redfin.com
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