According to a new report from Redfin, seasonally adjusted home-buying demand for the week of June 1-7 was 25% higher than it was pre-pandemic, in January and February.
This marks the eighth straight week of rising demand.
A lack of inventory continues to constrain home sales, but sellers are beginning to come back to the market, Redfin says. After falling to 21% below last year’s level the week of May 25-31, new listings were 15% below last year’s level during the week of June 1-7.
With demand surging and supply recovering, Redfin expects sales to strengthen. Mortgage purchase applications were up 7% year-over-year in the last week of May and up even more, 13%, in the first week of June.
Until supply catches up to demand, prices will rise. For the week of June 1-7, year-over-year growth in asking prices was up 9.9%, compared to 7.9% the week before, and 3.9% in January and February. Sales prices for the first week of June are up 3.1% year-over-year – an improvement from 1.3% in May, when offers from late March and April were still closing.
The percentage of newly listed homes accepting an offer within 14 days of their debut increased from 42% in May to 47% in the first week of June.
Redfin predicts that the flexibility to work remotely, combined with low interest rates, will lead to higher levels of homeownership in the U.S., which have mostly been declining since 2004.
“With interest rates so low, a lot of people want to buy who are currently renting in the city,” says Redfin Boston agent Elynn Chen. “They want to go somewhere for more space.”
To read the full update, click here.