Redfin Reports Home Prices Hit Another Record High, Pushing Pending Sales Down 4%

Rhea-AI Summary

The latest Redfin report reveals that the median U.S. home-sale price has hit a record $387,600 during the four weeks ending May 19, marking a 4% increase from the previous year.

Despite rising prices, pending home sales dropped by 4.2% year-over-year due to high housing costs and inventory.

Mortgage rates have slightly declined, with the weekly average at 7.02%, reducing the median monthly housing payment to $2,854.

New listings are up 8%, but overall inventory remains lower than typical spring levels, with many homeowners reluctant to sell due to high interest rates.

Redfin's data indicates a mixed housing market, with some metros experiencing significant price increases and others seeing decreases in pending sales and new listings.

Positive

• Median U.S. home-sale price rose to a record $387,600, up 4% year-over-year.
• Weekly average mortgage rates slightly declined to 7.02%, easing the median monthly housing payment.
• New listings increased by 8%, suggesting some market activity.
• Touring activity is up 31% from the start of the year.
• The average sale-to-list price ratio is maintaining at 99.5%, indicating strong seller pricing power.

Negative

• Pending home sales dropped by 4.2% year-over-year, the biggest decline in three months.
• Despite the rise in new listings, overall inventory remains lower than typical spring levels.
• Share of homes sold above list price is down to 31.3%, indicating a cooling market demand.
• Median days on the market increased by 3 days, showing slower sales transactions.
• Google searches for 'home for sale' declined by 8% from a month earlier, indicating reduced buyer interest.

Insights

Financial Analyst

Redfin's report highlights several key metrics that are critical for understanding the current state of the housing market. The most notable takeaway is the record high median home-sale price of $387,600, which represents a 4% increase from the previous year. This is occurring despite a 4.2% decline in pending home sales, which suggests that high prices are being driven largely by inventory shortages. The fact that inventory remains below typical spring levels, even with an 8% increase in new listings, further underscores this supply constraint.

From an investor's perspective, increasing home prices amid declining sales might indicate a constrained market where supply can't keep up with demand. This could be due to various factors, including homeowners being reluctant to sell due to unattractive mortgage rates. The slight dip in mortgage rates to 7.02% is a positive sign, as it might ease some pressure on potential buyers. However, the median monthly mortgage payment remains high at $2,854, which could continue to dampen overall market activity.

The long-term implications for investors could be mixed. On one hand, continued high prices might benefit real estate investments through increased property values. On the other hand, the ongoing inventory shortages and high mortgage rates could stymie transaction volumes, potentially impacting revenue for real estate companies like Redfin. Additionally, buyers' increased willingness to negotiate might affect the overall pricing power of sellers in this market.

Market Research Analyst

The data provided by Redfin offers a substantial view into the current dynamics of the housing market. The sharp increase in median sale prices, alongside a notable decrease in pending sales, reveals a market under dual pressures of high demand and limited supply. This scenario often leads to heightened competition among buyers and can result in higher closing prices, but also may drive some potential buyers out of the market due to affordability constraints.

The 8.5% increase in new listings is an interesting metric, suggesting some homeowners are willing to sell, although not enough to meet the overall demand. This situation is compounded by the higher percentage of homes being sold under their list price, indicating that buyers have some leverage, possibly due to the high mortgage rates and the financial strain they impose.

Looking at regional variations, markets like San Jose and Anaheim are seeing significant price increases, which could point to localized supply-demand imbalances. Investors should be aware of these regional differences as they can offer unique opportunities and risks. For instance, areas with high price growth might offer lucrative investment opportunities if the supply constraints persist, while regions experiencing declines could signify potential risks.

Overall, while the macroeconomic indicators show a market under supply constraints, the nuances of regional differences and buyer behavior suggest a complex landscape for investors to navigate.

Prices keep rising because this spring’s inventory is lower than usual. The sliver of good news for buyers is that mortgage rates have declined slightly

SEATTLE--(BUSINESS WIRE)-- (NASDAQ: RDFN) —The median U.S. home-sale price hit a record $387,600 during the four weeks ending May 19, up 4% from a year earlier. That’s according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. Weekly average mortgage rates dipped to 7.02% from a five-month high of 7.22% at the start of the month, bringing the median monthly housing payment to $2,854, roughly $20 shy of April’s all-time high.

High housing costs pushed pending home sales down 4.2% year over year, the biggest decline in three months (except the prior 4-week period, when sales declined 4.4%). Prices keep rising despite declining sales because there aren’t enough homes on the market: New listings are up about 8% year over year, but inventory remains lower than typical spring levels. Many homeowners are staying put because they would rather hold onto their relatively low mortgage rate than move up to a bigger and/or better home.

“Move-up buyers feel stuck because they’re ready for their next house, but it just doesn’t make financial sense to sell with current interest rates so high,” said Sam Brinton, a Redfin Premier agent in Salt Lake City, UT. “The homeowners listing right now are often doing so because they need to: One of my clients is selling because of a family emergency, and another couple is selling because they had a baby and simply don’t have enough room. Buyers should take note that many of today’s sellers are motivated; if a home doesn’t have other offers on the table, offer under asking price and/or ask for concessions because many sellers are willing to negotiate.”

For Redfin economists’ takes on the housing market, including more on 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 applicable)	Recent change	Year-over-year change	Source
Daily average 30-year fixed mortgage rate	7.09% (May 22)	Up from 6.99% a week earlier, but down from a 5-month high of 7.52% 4 weeks earlier	Up from 6.95%	Mortgage News Daily
Weekly average 30-year fixed mortgage rate	7.02% (week ending May 16)	Down from 5-month high of 7.22% 2 weeks earlier	Up from 6.39%	Freddie Mac
Mortgage-purchase applications (seasonally adjusted)		Declined 1% from a week earlier (as of week ending May 17)	Down 11%	Mortgage Bankers Association
Redfin Homebuyer Demand Index (seasonally adjusted)		Essentially unchanged from a month earlier (as of week ending May 19)	Down 11%	Redfin Homebuyer Demand Index, a measure of requests for tours and other homebuying services from Redfin agents
Touring activity		Up 31% from the start of the year (as of May 19)	At this time last year, it was up 22% from the start of 2023	ShowingTime, a home touring technology company
Google searches for “home for sale”		Down 8% from a month earlier (as of May 19)	Down 18%	Google Trends

Key housing-market data

U.S. highlights: Four weeks ending May 19, 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 May 19, 2024	Year-over-year change	Notes
Median sale price	$387,600	4%	All-time high
Median asking price	$420,250	6.6%	All-time high
Median monthly mortgage payment	$2,854 at a 7.02% mortgage rate	10.5%	$18 below all-time high set during the 4 weeks ending April 28
Pending sales	89,303	-4.2%	Biggest decline since 4 weeks ending Feb. 25 (except the prior 4-week period, when sales declined 4.4%)
New listings	102,671	8.5%
Active listings	901,194	14.8%
Months of supply	3.2	+0.6 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	44.9%	Down from 49%
Median days on market	33	+3 days
Share of homes sold above list price	31.3%	Down from 34%
Share of homes with a price drop	6.4%	+2 pts.	Highest level since Nov. 2022
Average sale-to-list price ratio	99.5%	-0.1 pts.

Metro-level highlights: Four weeks ending May 19, 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	Anaheim, CA (20.1%) Detroit (16.9%) San Jose, CA (12.9%) Oakland, CA (12.5%) West Palm Beach, FL (12%)	San Antonio (-1%) Fort Worth, TX (-0.6%)	Decreased in 2 metros
Pending sales	San Jose, CA (18.4%) San Francisco (8%) San Diego (4.3%) Newark, NJ (3.6%) Columbus, OH (3.3%)	West Palm Beach, FL (-15.3%) Atlanta (-14.9%) Houston (-14.5%) Phoenix (-12.3%) Providence, RI (-11.6%)	Increased in 10 metros
New listings	San Jose, CA (36.7%) Montgomery County, PA (26.2%) Phoenix (26.1%) Seattle (21.2%) San Diego (21%)	Atlanta (-8.1%) Chicago (-4.9%) Detroit (-3.9%) Virginia Beach, VA (-2.6%) Newark, NJ (-2%) Warren, MI (-1.8%)	Decreased in 6 metros

To view the full report, including charts, please visit:
https://www.redfin.com/news/housing-market-update-pending-sales-fall-prices-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 press@redfin.com. To view Redfin's press center, click here.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240523472231/en/

Redfin Journalist Services:

Kenneth Applewhaite

press@redfin.com

Source: Redfin

FAQ

What is the current median U.S. home-sale price according to Redfin?

The current median U.S. home-sale price is $387,600.

How much have pending home sales declined as reported by Redfin?

Pending home sales have declined by 4.2% year-over-year.

What are the current weekly average mortgage rates?

The current weekly average mortgage rate is 7.02%, down from a five-month high of 7.22%.

How much has the median monthly housing payment decreased?

The median monthly housing payment decreased to $2,854.

Why is inventory lower despite new listings being up?

Inventory remains lower because many homeowners are holding onto their lower mortgage rates and not selling.