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Daily average mortgage rates jumped to their highest level since last November after last week’s disappointing inflation report
SEATTLE, April 18, 2024–(BUSINESS WIRE)–(NASDAQ: RDFN) —The median U.S. home-sale price increased 5% from a year earlier during the four weeks ending April 14, bringing it to $380,250—just $3,095 shy of June 2022’s all-time high. That’s according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.
The average daily mortgage rate this week surpassed 7.4%, the highest level since last November, after a hotter-than-expected inflation report and the Fed’s confirmation that interest-rate cuts will be delayed. The combination of high mortgage rates and prices have brought homebuyers’ median monthly housing payment to a record $2,775, up 11% year over year.
There are signals that buyers are out there touring homes despite rising rates. Mortgage-purchase applications are up 5% week over week, and Redfin’s Homebuyer Demand Index—a measure of requests for tours and other buying services from Redfin agents—is near its highest level in seven months. Chen Zhao, Redfin’s economic research lead, said some house hunters are hoping to buy now because they’re concerned rates could rise more, and others have grown accustomed to elevated rates and pushed down their home-price budget accordingly.
“Home sales are slower than usual, but there are still people buying and selling because if not now, when?” said Connie Durnal, a Redfin Premier agent in Dallas. “I’ve had a few prospective buyers touring homes for the last several years, since mortgage rates started going up, and they wish they would have bought last year because prices and rates are even higher now. My advice to them: If you can afford to and you find a house you love, buy now. There’s no guarantee that rates will come down soon.”
For more of Redfin economists’ takes on the housing market, including how current financial events are impacting mortgage rates, please visit Redfin’s “From Our Economists” page.
Leading indicators
Indicators of homebuying demand and activity |
||||
Value (if |
Recent change |
Year-over-year |
Source |
|
Daily average 30-year fixed mortgage rate |
7.41% (April 17) |
Up from 7% one month earlier; highest level since November 2023 |
Up from 6.61% |
Mortgage News Daily |
Weekly average 30-year fixed mortgage rate |
6.88% (week ending April 11) |
Up just slightly from 6.82% a week earlier |
Up from 6.27% |
Freddie Mac |
Mortgage-purchase applications (seasonally adjusted) |
Increased 5% from a week earlier (as of week ending April 12) |
Down 10% |
Mortgage Bankers Association |
|
Redfin Homebuyer Demand Index (seasonally adjusted) |
Up 8% from a month earlier (as of week ending April 14) |
Down 11% |
Redfin Homebuyer Demand Index, a measure of requests for tours and other homebuying services from Redfin agents |
|
Touring activity |
Up 33% from the start of the year (as of April 14) |
At this time last year, it was up 23% from the start of 2023 |
ShowingTime, a home touring technology company |
|
Google searches for “home for sale” |
Unchanged from a month earlier (as of April 14) |
Down 17% |
Google Trends |
Key housing-market data
U.S. highlights: Four weeks ending April 14, 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 |
Year-over-year |
Notes |
|
Median sale price |
$380,250 |
4.7% |
|
Median asking price |
$413,225 |
6.4% |
Biggest increase since Oct. 2022; all-time high |
Median monthly mortgage payment |
$2,775 at a 6.88% mortgage rate |
10.6% |
All-time high |
Pending sales |
86,086 |
-2.3% |
|
New listings |
93,332 |
10.8% |
|
Active listings |
832,748 |
9.6% |
|
Months of supply |
3.3 months |
+0.4 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 |
42.6% |
Down from 44% |
|
Median days on market |
35 |
-1 day |
|
Share of homes sold above list price |
29.2% |
Essentially unchanged |
|
Share of homes with a price drop |
5.9% |
+1.6 pts. |
|
Average sale-to-list price ratio |
99.2% |
+0.2 pts. |
Metro-level highlights: Four weeks ending April 14, 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 |
Metros with biggest |
Notes |
|
Median sale price |
Anaheim, CA (24.8%) Providence, RI (14.6%) Nassau County, NY (14.3%) West Palm Beach, FL (13.5%) New Brunswick, NJ (13.1%) |
San Antonio, TX (-1%) |
Declined in just 1 metro |
Pending sales |
San Jose, CA (25.6%) San Francisco (11.2%) Oakland, CA (7.1%) Columbus, OH (6.7%) Seattle (6.4%) |
Nassau County, NY (-14.9%) Atlanta (-13.6%) Houston (-11.6%) Riverside, CA (-10.8%) Fort Lauderdale, FL (-10%) |
Increased in 14 metros |
New listings |
San Jose, CA (46.6%) Sacramento, CA (27.6%) Phoenix (27.4%) Jacksonville, FL (27.2%) Dallas (22.9%) |
Newark, NJ (-12.4%) Providence, RI (-6.3%) Milwaukee (-4.6%) Chicago (-4.5%) Detroit (-3.1%) |
Declined in 9 metros |
To view the full report, including charts, please visit:
https://www.redfin.com/news/housing-market-update-home-prices-mortgage-rates-increase
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 [email protected]. To view Redfin’s press center, click here.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240418348073/en/
Contacts
Redfin Journalist Services:
Kenneth Applewhaite, 206-414-8880
[email protected]
Source: finance.yahoo.com
While buyers now have slightly more options, housing costs remain historically high. The typical mortgage payment is $2,671, just $47 below last October’s record level. These high costs have contributed to an 8% decline in pending sales (the biggest drop in five months) and a fourth consecutive week of declining mortgage applications. Despite these challenges, … [Read more…]
The US housing market should experience a warm return this spring, thanks to calming economic data.
The average rate for a 30-year loan declined to 6.63% from 6.69% the week prior, according to Freddie Mac on Thursday. Mortgage rates dropped for the second time in 2024 and are expected to retreat further as inflation moderates, which could help spark a housing rebound.
As most indicators point to interest rate cuts this coming year, housing experts are predicting a busier spring buying season starting in the next couple of months as more supply and demand return to the housing market thanks to the mortgage rate drop.
“So long as core inflation and economic activity continue to moderate, mortgage rates aren’t expected to rise further,” said Orphe Divounguy, senior macroeconomist at Zillow. “If layoffs remain low, and mortgage rates ease, housing market activity should rebound modestly this spring — meaning more listings coming on the market and more sales.”
Read more: Mortgage rates below 7% — is this a good time to buy a house?
Mortgage applications fall
The likelihood of a bustling spring housing market will depend heavily on where mortgage rates head next. Homebuyers have proven again they are rate-sensitive amidst today’s elevated home prices. After last week’s slight rate increase, the volume of mortgage application activity retracted 7.2% on a weekly basis, according to an application survey tracked by the Mortgage Bankers Association (MBA) for the week ending Jan. 26.
“Low existing housing supply is limiting options for prospective buyers and is keeping home price growth elevated, resulting in a one-two punch that continues to constrain home purchase activity,” said Joel Kan, MBA’s deputy chief economist.
Affordability challenges also worsened due to last week’s rate bump. The average loan size for purchase applications increased to $444,100, the largest since May 2022, according to the MBA.
Low application rates and hardship don’t mean homebuyers have disappeared, though. Redfin’s Homebuyer Demand Index — measuring buyers’ requests for home tours and other buying services on Redfin — showed that interest increased 6% over the last seven days in the week ending Jan. 28.
“I believe this year’s market will launch in the spring, once 6% rates are even more entrenched in buyers’ psyches, and more homeowners list their houses,” said Hal Bennett, a Redfin Premier agent.
Wall Street banks and industry experts expect cuts. Wells Fargo said in its 2024 annual outlook that the economy will moderate by mid-2024, prompting the Fed to cut rates by 225 basis points by early 2025. Housing experts at Fannie Mae are predicting mortgage rates will decline below 6% by the end of 2024, leveling off at about 5.8%.
During yesterday’s Federal Open Market Committee meeting, the Fed announced it is keeping its benchmark rate steady in an effort to suppress inflation to 2%. Even so, Fed Chair Jerome Powell expressed optimism that rates have peaked and a cut could come soon. But any drop is not a guarantee.
“Inflation is still too high, ongoing progress in bringing it down is not assured, and the path forward is uncertain,” Powell said during the FOMC conference.
Read more: What the Fed rate decision means for bank accounts, CDs, loans, and credit cards
The latest Personal Consumption Expenditures (PCE) index — the Fed’s preferred inflation measurement — increased 2.6% annually in December, falling below 3% for the first time since March 2021. More importantly, though, is that an annualized PCE using data from the prior three to six months is now below 2%.
“The lower inflation readings over the second half of last year are welcome,” Powell added, “but we will need to see continuing evidence to build confidence that inflation is moving down sustainably toward our goal.”
Rebecca Chen is a reporter for Yahoo Finance and previously worked as an investment tax certified public accountant (CPA).
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Source: finance.yahoo.com
Not all is gloomy in the housing market. Redfin’s Homebuyer Demand Index has been on an upward trend since mid-January. The number of home tours has also seen a 16% increase since the start of the year, outperforming the growth observed last year during the same period. In addition, there’s been a 7% year-over-year increase … [Read more…]
High mortgage rates and harsh weather are pushing down home sales, but some house hunters are touring and getting a feel for the market.
The bumpy start to 2024’s housing market continues, with daily average mortgage rates posting their biggest one-day increase in over a year on February 2. The jump came after a hotter-than-expected January jobs report and the Fed’s confirmation that they’re unlikely to cut interest rates in the next two months, which means mortgage rates will probably remain elevated near their current level for at least that long.
Rising home prices are exacerbating rising rates, with the typical monthly mortgage payment just about $100 shy of October’s all-time high. The median U.S. sale price rose 5.4% year over year during the four weeks ending February 4, the biggest increase in over a year. High housing costs are pricing out many would-be homebuyers; pending sales are down 8%, the biggest decline in four months. There are also a few other contributors to sales falling: Harsh winter weather in the first half of January delayed a lot of homebuying deals, and pending sales were improving at this time last year as mortgage rates temporarily dropped.
Still, some house hunters are at least getting a feel for the market. Redfin’s Homebuyer Demand Index–a seasonally adjusted measure of requests for tours and other buying services from Redfin agents–has steadily risen since mid-January, and a separate measure of home tours shows they’ve increased 16% since the start of the year, compared with a 10% rise at this time last year. Some sellers are jumping in, too, with new listings up 7% year over year.
“We’re seeing a bit of recovery with house hunters touring homes, but even demand at the earliest stages isn’t up as much as we would expect at this time of year,” said Chen Zhao, Redfin’s economic research lead. “That’s because mortgage rates are climbing again and winter weather has been harsher than usual in much of the country, keeping some house hunters at home.”
Luis Rojas, a Redfin Premier agent in the Viera West, FL area, said today’s housing market is touch and go. “High mortgage rates brought the local market to a near-standstill from August through November, activity picked up when rates dropped a bit in mid-December, and now it’s slowing down again as rates rise,” Rojas said. “I’m advising buyers–especially first-timers–that the mortgage rates they see in the news aren’t the be-all and end-all. Some local lenders are willing to give rates in the 5% range for new construction projects because any business is better than no business.”
Indicators of homebuying demand and activity | ||||
Value (if applicable) | Recent change | Year-over-year change | Source | |
Daily average 30-year fixed mortgage rate | 6.92% (Feb. 7) | Up from 6.75% a week earlier | Up from 6.39% | Mortgage News Daily |
Weekly average 30-year fixed mortgage rate | 6.63% (week ending Feb. 1) | Near lowest level since May | Up from 6.09% | Freddie Mac |
Mortgage-purchase applications (seasonally adjusted) | Down 1% from a week earlier; up 3% from a month earlier (as of week ending Feb. 2) | Down 19% | Mortgage Bankers Association | |
Redfin Homebuyer Demand Index (seasonally adjusted) | Up slightly from a week earlier, but down 7% from a month earlier (as of week ending Feb. 4) | Down 14% | Redfin Homebuyer Demand Index, a measure of requests for tours and other homebuying services from Redfin agents | |
Google searches for “home for sale” | Down 2% from a month earlier (as of Feb. 3) | Down 16% | Google Trends | |
Touring activity | Up 16% from the start of the year (as of Feb. 6) | At this time last year, it was up 10% from the start of 2023 | ShowingTime, a home touring technology company |
U.S. highlights: Four weeks ending February 4, 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 February 4, 2024 | Year-over-year change | Notes | |
Median sale price | $361,498 | 5.4% | Biggest increase since Oct. 2022 |
Median asking price | $395,949 | 7% | Biggest increase since Sept. 2022 |
Median monthly mortgage payment | $2,607 at a 6.63% mortgage rate | 11.5% | Down roughly $110 from all-time high set in October 2023, but up roughly $250 from the four weeks ending Dec. 31 |
Pending sales | 68,872 | -7.8% | Biggest decline since October 2023 |
New listings | 70,415 | 6.6% | |
Active listings | 740,834 | -3.5% | |
Months of supply | 4.2 months | Unchanged | 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 | 33.3% | Up from 32% | |
Median days on market | 48 | -2 days | |
Share of homes sold above list price | 22.4% | Up from 20% | |
Share of homes with a price drop | 5.5% | +1 pt. | |
Average sale-to-list price ratio | 98.2% | +0.5 pts. |
Metro-level highlights: Four weeks ending February 4, 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 |
Miami (13.4%) Anaheim, CA (13.4%) Detroit (13.3%) Warren, MI (12.1%) Chicago (11.3%) |
San Antonio, TX (-4.7%) Austin, TX (-3.7%) |
Declined in 2 metros |
Pending sales | San Jose, CA (13.8%)
San Francisco, CA (6%) Anaheim, CA (4.5%) Riverside, CA (0.4%) Columbus, OH (0.2%) |
San Antonio, TX (-33.2%)
Portland, OR (-30.2%) Nashville, TN (-21.5%) New Brunswick, TN (-19.4%) Houston (-18.5%) |
Increased in 5 metros |
New listings | Dallas, TX (27.1%)
Miami (26.9%) Jacksonville, FL (26.3%) Fort Lauderdale, FL (23.6%) San Diego, CA (22.1%) |
Chicago (-17.8%)
Atlanta (-16%) Milwaukee, WI (-14%) Portland, OR (-13.6%) Nashville, TN (-10.4%) |
Declined in 14 metros |
Refer to our metrics definition page for explanations of all the metrics used in this report.
Source: redfin.com
Refinancing activity rebounded for the week ending February 2 after declining the previous week, as mortgage rates stabilize in the under-7 percent level, contributing to a rise in home loans application, the Mortgage Bankers Association (MBA) said on Wednesday.
The Refinance Index jumped 12 percent from the week before February and also rose by a percent compared to one year ago, according to MBA. Meanwhile, mortgage applications jumped by nearly 4 percent in the same time span.
The average cost of a 30-year fixed rate mortgage for a loan of $766,550 ticked up slightly to 6.80 percent compared to 6.78 the previous week.
“Mortgage rates have stayed close to where they started the year, despite swings in Treasury yields because of slowing inflation offset by stronger than expected readings on the job market,” Joel Kan, MBA’s deputy chief economist, said in a statement shared with Newsweek. “Rates at these levels have not prompted much of a reaction in the refinance market, as most homeowners have mortgages with much lower rates.”
Mortgage rates peaked at about 8 percent in the fall of 2023, making the cost of a home loan the highest it had been since the turn of the century. The elevated rate environment discouraged both buyers and sellers to step into the housing market who were reluctant to incur higher monthly payments of their housing loan.
Part of the reason rates jumped so high was due to the Federal Reserve’s hiking of its funds rate to battle soaring inflation. The rise in prices is cooling giving confidence that policymakers will slash rates but a strong jobs market is creating uncertainty on how quickly those cuts will happen.
But to begin the year, there is evidence that buyers are showing interest in dipping into the housing market, according to real estate platform Redfin, as rates have fallen over the last few weeks.
Redfin’s Homebuyer Demand Index, which tracks requests for tours, went up 6 percent for the week ending January 28, the platform said. Real estate agents say, however, that that increase in interest has yet to translate to a substantial jump in sales.
MBA experts are seeing a similar bubbling up of buyer interest.
“Purchase activity has been strong to start 2024 compared to the final quarter of 2023. However, activity is still weaker than a year ago because of low housing supply,” MBA’s Kan said.
Supply of homes is a huge challenge for the housing market. Housing economists have told Newsweek in the past that the market is 4 million homes short of demand, contributing to a jump in prices.
Some economists suggest that as mortgage rates fall, the used homes market may pick-up as sellers would begin to come out of the sidelines and finally put their homes in the market.
“Once they start moving, and I suspect we’ll see more and more of those folks moving in the coming year, they’ll have to become somewhat aggressive on pricing, they’re going to have to lower their price,” Mark Zandi, chief economist at Moody’s Analytics, told Newsweek last week.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Source: newsweek.com
Soaring mortgage rates are taking a major chunk out of homebuyers’ budgets, according to a new report from Redfin.
A homebuyer on a $3,000 monthly budget, for example, could afford a $429,000 home with a 7.4% mortgage rate, using rate data from August 23. That buyer lost $71,000 in purchasing power compared to one year ago when a $500,000 home would have been accessible to them with an average rate of about 5.5%.
The daily average mortgage rate of 7.36% on August 23 is close to its highest level in over 20 years, with the average monthly mortgage payment is around $2,700 today, $400 higher than at the same point in August of 2022.
“The combination of high monthly mortgage payments and historically low housing inventory has pushed many would-be homebuyers out of the market,” the report said. Home-purchase applications dropped to their lowest level in nearly 30 years during the week ending August 18, and Redfin’s Homebuyer Demand Index—a measure of requests for home tours and other buying services from Redfin agents—was down 7% year over year.
Demand levels vary by region. Agents say cash-strapped buyers are negotiating hard to get deals in this environment. But in Tennessee, as with other high-demand areas, there’s a limit to how low buyers can go.
“Some buyers are hoping they can get a home for under asking price to make up for high interest rates because they’re hearing the housing market is slow, but what’s happening nationally isn’t necessarily true here,” said Kristin Sanchez, a Redfin agent based in Smyrna, Tenn.
Tennessee, a hot spot for people relocating from other states, boasts a healthy job market that’s fueling strong demand, Sanchez said. As a result, homes are typically selling at or above asking price with two to three offers, she added.
Mortgage-purchase applications during the week ending August 18 also saw a decline of 5% from the prior week, on a seasonally adjusted basis. Home-purchase applications dropped to their lowest level since 1995, while purchase applications were down 30% from the same point last year.
Source: housingwire.com
Southern California’s housing market continued rebounding in June, despite below-average sales and the highest mortgage rates in seven months.
With inventory at the lowest level for a June in a dozen years, even this year’s diminished demand exceeds the number of homes for sale, driving up prices.
As a result, the median price of a Southern California home — or price at the midpoint of all sales — was $730,000 in June, CoreLogic reported Wednesday, Aug. 2.
SEE MORE: Mortgage industry, homebuyers pinched by high rates, declining cash
That’s down just 0.7 of a percent, or $5,000, from a year earlier. It also follows four months of off-and-on price gains that brought the region’s median within $20,000 of the all-time high of $750,000 reached in April 2022.
Home prices in the six-county region were up 9% since the beginning of the year.
And prices were up by more than 3% in Orange and San Diego counties, CoreLogic figures show. In Orange County, the median home price hit a record high of $1.059 million.
“The continued imbalance between buyers and sellers continues to pressure home prices,” CoreLogic Chief Economist Selma Hepp said in a statement Tuesday. She added that four out of 10 U.S. home sales are cash transactions, making them immune from higher mortgage rates.
RELATED: Shopping for a home? List of challenges grows
Nevertheless, lower demand and reduced inventory limited home sales to 16,320 transactions in June, the smallest tally for any June in records dating back 36 years, CoreLogic figures show.
June home sales were down 24.3% from a year earlier and we’re 40% off June 2021 levels, when mortgage rates were less than half of where they are now and the homebuying frenzy was hottest.
It was also the 19th straight month that sales were down on a year-over-year basis, CoreLogic figures show.
The pattern is the same that has gripped the region’s housing market since the start of the year, with homeowners choosing to keep historically low mortgage rates rather than selling.
“Despite elevated interest rates, the demand for housing continues to outpace the availability of homes for sale as buyers slowly adapt to the new normal,” Jennifer Branchini, president of the California Association of Realtors, said last month.
Here are key takeaways from the latest housing market data:
— The region’s market contrasts with the nation as a whole. CoreLogic reported Tuesday that U.S. single-family home prices were up by 1.6% since June 2022 and by 4.8% since the beginning of the year.
Locally, the median price for a single-family home was $785,000, down 1.3% from June 2022.
— Home prices rose 2.1% from May to June even though the typical house payment for a median-priced home hit a high of $3,772 per month.
Thirty-year fixed-mortgage rates averaged 6.7% in June, according to Freddie Mac, boosting a typical Southern California house payment by more than 10% from a year earlier. June’s average was the highest since November.
SEE MORE: What the Fed’s July rate hike means for homebuyers and sellers
— Home prices are increasing despite lukewarm demand, figures from Redfin show. Redfin’s Homebuyer Demand Index, based on home tour and service requests, is down 3% from a year ago, the online real estate brokerage reported Thursday. In addition, mortgage-purchase applications are down about 23%.
— But inventory has dropped more than demand. For-sale inventory in the region fell steadily for the past 11 months to just over 25,000 listings in June. That’s the lowest number for June and the fifth-lowest for any month since February 2012.
— Rising mortgage rates and higher prices hit entry-level buyers even harder, especially in the region’s most affordable area, the Inland Empire. The minimum income needed to afford an entry-level home rose 7.5% to almost $105,000 a year in the Inland Empire, Redfin reported.
By comparison, the minimum income needed to buy a home rose 4.7% to $151,070 a year in Los Angeles County; 6.3% to $180,224 a year in Orange County; and 6.7% to $161,671 a year in San Diego county.
“There’s no such thing as a starter home anymore,” Redfin Senior Economist Sheharyar Bokhari said. “The most affordable homes for sale are no longer affordable to people with lower budgets.”
— While mortgage rates will probably stay elevated for several more months, they’re likely to start coming down before the end of the year, Redfin researchers said.
CoreLogic projected that U.S. home price appreciation will continue accelerating for the rest of 2023, reaching 6.8% by next January.
Here’s a county-by-county breakdown of median home prices and sales for June, with annual percentage changes:
— Los Angeles County’s median fell 2.4% to $830,000; sales were down 22.7% to 5,278 transactions.
— Orange County’s median rose 3.3% to $1.059 million; sales were down 16.6% to 2,296 transactions.
— Riverside County’s median fell 2.9% to $560,000; sales were down 25.7% to 3,278 transactions.
— San Bernardino County’s median fell 5.0% to $475,000; sales were down 28.7% to 2,269 transactions.
— San Diego County’s median rose 3.1% to $835,000; sales were down 24.5% to 2,581 transactions.
— Ventura County’s median rose 0.2% to $807,000; sales were down 35.6% to 618 transactions.
Source: ocregister.com
Every year, housing demand picks up during the traditional spring buying season and eventually begins to fade as summer takes hold and kids make their way back to school.
But this year’s seasonal slowdown is even more pronounced due to what Redfin refers to as “buyer fatigue.”
So why are prospective home buyers tired? Well, Redfin attributes the lethargy to “high prices and low selection.”
Apparently they’re still touring properties in droves, but they’re less likely to make an offer. If they do, it’s more often on a lower priced home. Price sensitivity is becoming more of an issue.
This all comes from the company’s inaugural Redfin Housing Demand Index, which is forecasting slowdowns in both home sales and home price increases.
The index, which is scaled to equal 100 as of January 2013, debuted at 113 in its first edition, up 13% from June 2014.
It charted a similar path this year as in previous years, but the 6.7% decline from May to June is nearly double the 3.9% drop seen in the same period of 2014.
If you’re wondering, the data comes from millions of visits to Redfin’s home listing pages, along with the number of tours and offers made by Redfin customers.
Redfin also said it expects home prices to increase just 4.3% year-over-year in July, and only 2.2% YoY in August.
Contrary to popular belief, home prices can’t keep increasing forever without meaningful increases in the wage department.
And paying well over list price is starting to become less common as starting prices are tested by more discerning buyers.
Home sales are also slated to slow down, with Redfin forecasting a YoY gain of 14.3% in July, followed by a 4.6% YoY increase in August.
There’s also less international competition thanks to a strong U.S. dollar. It was pretty common for Europeans, Canadians, and the Chinese to purchase properties in the States.
But now that their currencies have been devalued sharply against the dollar, it’s mainly Americans in the mix.
For some markets popular with foreign investors that have already experienced major price appreciation, demand will surely wane.
Meanwhile, the brains over at the S&P Dow Jones Indices expect home prices to moderate, according to the latest monthly home price report released today.
The S&P/Case-Shiller U.S. National Home Price Index increased 4.4% in May compared to a year earlier, up ever so slightly from the 4.3% YoY increase seen in April.
The 10-City Composite gained 4.7% YoY and the 20-City Composite gained 4.9% from a year earlier.
Managing Director and Chairman of the Index Committee at S&P David M. Blitzer argued that first-time home buyers have been the “weak spot in the market,” with hefty down payments, not rising mortgage rates, the likely culprit.
He believes home prices are more likely to slow than accelerate over the next two years, and thinks they’ve settled in at a steady 4-5% annual pace after some “bubbly” years.
This might be good news for those looking to buy a home who were previously priced out of the market. More moderate gains and realistic listing prices could draw some fence sitters back in.
Read more: What’s my outlook on the real estate market?
Source: thetruthaboutmortgage.com
There’s so little housing stock that even as mortgage rates climb, homes are selling above their asking price, a report by Redfin says.
New home listings are down 25% since last year, sinking beneath 2020 lows, according to the report. Total home listings are down 12%.
This supply slump made monthly homeowner payments skyrocket, but Redfin says, “despite the double dilemma of low inventory and high prices, early-stage homebuyer demand is picking up.”
The amount of home shoppers actually increased compared to last summer: the brokerage company’s seasonally adjusted homebuyer demand index, which measures home tours and other homebuying service requests, increased by 11% this year.
Mortgage applications were also on the rise in June but just dropped again.
The demand index remained below 2020 and 2021 levels, however, as both prices and rates have increased significantly over the past three years.
The average 30-year fixed mortgage rate hit an all time low of 2.65% in January 2021. Then it sprung back up, peaking at 7.08% last November. It’s remained high ever since — this week, the average rate was 6.81% according to Freddie Mac.
Home price trends follow a similar pattern: Redfin’s seasonally adjusted data shows a dip in the national median sale price during 2020, when it hit $292,000. Then, it steadily rose until last spring, reaching $415,000. The median price then dipped down slightly. Now, Redfin says, it’s $402,000.
The median asking price is up right now, too, but not by much. It hit $395,725 this month, an increase of only 1.1% from last year.
“Almost every home is getting multiple offers and selling over asking price,” Redfin agent Jeremy Lucas said in the report. “The lack of supply is making it feel almost like 2021 all over again, but higher rates mean bidding wars are happening more in the $500,000 range than the $700,000 range because people can afford less.”
Homebuyer payments, which Redfin calculates using the 4-week rolling average of the median asking price, are shockingly high. Using last week’s average interest rate of 6.71%, Redfin estimates that homebuyers will have to pay $2,622 each month, an increase of 13.6% from the same time last year.
There were only 770,210 homes for sale this month, and listings aren’t rising like they usually do in the summer. Instead, they’ve remained flat all year.
The average home has an average sale-to-list price ratio of 100.1%, meaning homes are selling for slightly more than their asking price. It’s the first time the ratio breached 100% this year.
The “lack of homes for sale is the main reason” for this, the report says, because homebuyers are battling it out in an unusually sparse market.
Source: nationalmortgagenews.com