Housing Market Cooled in October, But Relief For Homebuyers Was Short-Lived

Rhea-AI Summary

The housing market showed signs of cooling in October 2021, with the median home price reaching $378,700, a 13% increase year-over-year but the lowest growth rate since December 2020. Home sales declined 8% year-over-year, and new listings fell 11%. Despite these declines, pending sales rose 3% from September. The Chief Economist, Daryl Fairweather, cited a severe lack of inventory as a major constraint, though he remains optimistic about improvements in new construction for 2022. The data indicates a challenging environment for homebuyers but some recovery in demand.

Positive

• Median home prices increased by 13% year-over-year.
• Pending sales rose by 3% from September, indicating a potential rebound in demand.

Negative

• Home sales fell by 8% year-over-year, marking the largest decline in 16 months.
• New listings decreased by 11% from the previous year, contributing to inventory shortages.

SEATTLE, Nov. 22, 2021 /PRNewswire/ -- (NASDAQ: RDFN) —The median price of homes sold in October was $378,700, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. This is up 13% from a year earlier, the lowest growth rate since December 2020.

October marked the 15th consecutive month of double-digit price gains. Seasonally-adjusted closed home sales and new listings of homes for sale both fell from a year earlier, by 8% and 11% respectively. Overall the housing market experienced fairly typical seasonal cooling in October. However, relief for homebuyers may be short-lived as pending sales rose 3% from September and early signals of demand are picking back up again in the first weeks of November.

"The severe lack of inventory is restricting home sales," said Redfin Chief Economist Daryl Fairweather. "Even though plenty of people bought homes last year, many homebuyers waited while the pandemic went from bad to worse and remote-work policies were finalized. The homebuyers who are just beginning their search are finding that the well has run dry. But I am hopeful that as it becomes easier to get building materials, we will finally have a strong year for new construction in 2022. That's what the market needs more than anything."

Market Summary	October 2021	Month-Over-Month	Year-Over-Year
Median sale price	$378,700	0.9%	13.2%
Homes sold, seasonally-adjusted	608,400	-0.4%	-8.1%
Pending sales, seasonally-adjusted	618,300	2.6%	2.5%
New listings, seasonally-adjusted	635,800	-0.9%	-10.6%
All Homes for sale, seasonally-adjusted	1,379,200	-2.6%	-18.8%
Median days on market	21	3	-8
Months of supply	1.3	-0.1	-0.3
Sold above list	45.8%	-2.1 pts†	11 pts†
Median Off-Market Redfin Estimate	$380,700	-0.7%	17.9%
Average Sale-to-list	100.8%	-0.3 pts†	1.2 pts†
Average 30-year fixed mortgage rate	3.07%	+0.17 pts†	+0.24 pts†

† - "pts" = percentage-point change

Median sale prices increased from a year earlier in all but one of the 85 largest metro areas Redfin tracks: Bridgeport, CT (Fairfield County), where prices were down 4.2%. A year ago home price gains in Bridgeport had peaked at 40% while the area rode a wave of in-migration of homebuyers leaving New York City. Price declines over the past few months are likely a continued cooling from an extremely overheated state. The largest price increases in October 2021 were in Phoenix, AZ (+25%), Austin, TX (+25%) and McAllen, TX (+24%).

Seasonally-adjusted home sales in October were down 8% from a year earlier, the largest decline in 16 months. Home sales fell in 76 of the 85 largest metro areas Redfin tracks. The biggest sales declines were seen in Bridgeport, CT (-26%), New Brunswick, NJ (-22%) and Salt Lake City (-21%). The largest gains were in places where sales were still somewhat depressed in October 2020, including Honolulu (+18%), New York (+11%), and San Jose, CA (+7%).

Seasonally adjusted active listings—the count of all homes that were for sale at any time during the month—fell 19% year over year in October, on par with recent months.

Only one of the 85 largest metros tracked by Redfin posted a year-over-year increase in the number of seasonally adjusted active listings of homes for sale: Tacoma, WA (+2%). The biggest year-over-year declines in active housing supply in September were in Baton Rouge, LA (-50%), Salt Lake City (-50%) and North Port, FL (-41%).

Seasonally-adjusted new listings of homes for sale were down 11% in October from a year earlier, the largest decline in eight months. New listings fell from a year ago in 78 of the 85 largest metro areas. The biggest declines were in Salt Lake City, UT (-59%), Allentown, PA (-58%) and Baton Rouge (-52%). New listings rose the most from a year ago in Oklahoma City (+6%), Buffalo, NY (+3%) and Austin, TX (+2%).

The typical home that sold in October went under contract in 21 days—more than a week faster than a year earlier, when homes sold in a median 29 days, but up three days from the record low of 15 days in June. In October, 46% of homes sold above list price, down 11 percentage points from the record high in June, but up 11 percentage points from a year earlier. The average sale-to-list price ratio also dipped slightly in October to 100.8%, down from a record high of 102.6% in June but up from 99.5% a year earlier.

To view the full report, including charts and additional metro-level highlights, please visit: https://www.redfin.com/news/housing-market-cooled-in-october/

About Redfin
Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, instant home-buying (iBuying), rentals, lending, title insurance, and renovations services. We sell homes for more money and charge half the fee. We also run the country's #1 real-estate brokerage site. 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 take an instant cash offer from Redfin or have our renovations crew fix up their home 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 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 6,000 people.

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.

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SOURCE Redfin

FAQ

What was the median home price in October 2021 for RDFN?

The median home price in October 2021 was $378,700.

How did home sales perform in October 2021 according to RDFN?

Home sales declined by 8% year-over-year in October 2021.

What was the change in new listings in October 2021 for RDFN?

New listings of homes for sale fell by 11% year-over-year in October 2021.

What does RDFN's report indicate about pending sales in October 2021?

Pending sales rose by 3% from September 2021.

What challenges are homebuyers facing according to RDFN's October report?

Homebuyers are facing a severe lack of inventory which is restricting sales.