A new report from Redfin shows the typical U.S. home sold for $382,500 during the four weeks ending July 16, up 2.1% from a year earlier. That’s the biggest increase since December 2022 and the second straight price uptick after nearly five months of declines. Asking prices have been increasing for more than a month.
Prices are rising substantially in some metro areas, including Milwaukee, where the housing market remained relatively steady throughout the pandemic. They’re declining in other parts of the country, with the biggest drops in places where prices soared during the pandemic, including Phoenix and Austin, Texas.
High home prices and mortgage rates pushed the typical homebuyer’s monthly payment up to a record $2,656. That’s up 15% from a year earlier. Housing payments are likely to remain elevated because even slightly lower rates may escalate competition for the few homes on the market and push up prices for the foreseeable future.
Prices are rising because demand outweighs supply. Pending home sales are down 15% year over year, but new listings are down 25%, with homeowners handcuffed by relatively low mortgage rates. The total number of homes for sale is down 16%, the biggest dip in a year and a half, and inventory also posted an unseasonal monthly decline.
“Even though buyers are trepidatious about high mortgage rates, we’re seeing bidding wars in several pockets of the market because there are so few options and even fewer good options,” says Jordan Hammond, a Redfin Premier agent based in Raleigh, N.C.
Sale prices increased most in Milwaukee (12.2% YoY), Miami (9.7%), Cincinnati (9.5%), Newark, N.J. (7.3%) and Anaheim, Calif. (6.9%).
New listings declined most in Las Vegas (-47.8% YoY), Phoenix (-41.1%), Providence, R.I. (-36.9%), Seattle (-35.8%) and Newark, N.J. (-34.8%).
Months of supply was 2.8 months, the highest level since April. Four to five months of supply is considered balanced, with a lower number indicating seller’s market conditions.
Of homes that went under contract, 29.8% 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, the shortest span in 10 months.
Nearly 40% of homes sold above their final list price (36.6%), down from 47% a year earlier.
The average sale-to-list price ratio, which measures how close homes are selling to their final asking prices, was 100%. That’s down from 101.2% a year earlier.
Image by Freepik.
