A new report from Redfin shows the typical U.S. home sold for roughly $382,000 during the four weeks ending July 23, up 2.6% from a year earlier, the biggest increase since November. For newly listed homes, the median asking price was $390,088, up 2.4% from a year earlier. That’s the biggest increase since January.
Still, homebuyers are getting a bit of relief as mortgage rates inch down from the eight-month high reached a few weeks ago. The typical monthly mortgage payment is $2,599 at today’s average weekly rate, down $55 from the all-time high of $2,654 in early July.
Today’s housing market is unusual because prices are increasing despite lukewarm demand. Redfin’s Homebuyer Demand Index is down 3% from a year ago, and mortgage-purchase applications are down about 23%. But inventory has dropped more than demand, with homeowners hanging onto their comparatively low mortgage rates, which is sending prices up.
New listings are down 22% from a year ago, and the total number of homes for sale is down 17%, the biggest decline in a year and a half. Continuing a year-plus streak of double-digit declines, pending sales are down 15%, partly because the lack of inventory is tying potential homebuyers’ hands.
This week’s news that the Fed is no longer forecasting a broad economic recession is hopeful for the housing market, despite the simultaneous interest-rate hike. The Fed indicated that a soft landing is more likely than they had previously thought, which would mean interest rates went high enough to tame inflation but not enough to cause a surge in unemployment and send the economy into a recession.
“This is hopeful news for the housing market in a few ways,” says Chen Zhao, economic research lead, Redfin. “Avoiding a recession means Americans will hold onto their jobs, for the most part, and feel more confident about purchasing big-ticket items like a house.
“Steady progress on taming inflation means that while mortgage rates will probably stay elevated for at least a few months, they’re likely to start coming down before the end of the year. That should encourage some sellers and buyers to jump into the market.”
The median home sale price was $381,750, up 2.6% from a year earlier. That’s the biggest increase since November.
Sale prices increased most in Miami (11.9% YoY), Milwaukee (9.3%), Cincinnati (8.9%), Anaheim, Calif. (8.3%) and West Palm Beach, Fla. (7.4%).
Sale prices declined in 20 metros, with the biggest drops in Austin, Texas (-8.8% YoY), Detroit (-6.4%), Phoenix (-4.7%), Las Vegas (-3.9%) and Sacramento, Calif. (-3.8%).
New listings declined in all metros Redfin analyzed. They fell most in Las Vegas (-45.2% YoY), Phoenix (-38.9%), Newark, N.J. (-34.3%), Providence, R.I. (-32.9%) and New Brunswick, N.J. (-31.7%).
Months of supply was 2.8 months, the highest level since March. Four to five months of supply is considered balanced, with a lower number indicating seller’s market conditions.
Of homes that went under contract, 43.9% had an accepted offer within the first two weeks on the market, on par with the share a year earlier.
Homes that sold were on the market for a median of 27 days, up from 22 days a year earlier.
Nearly 40% of homes sold above their final list price (36.3%), down from 45% a year earlier.
The average sale-to-list price ratio was 100%. That’s down from 101% a year earlier.
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