Redfin Reports Home Prices Hit New High, But Buyers Gain Power as Stale Listings Pile Up and Price Drops Become More Common

Rhea-AI Summary

Redfin reports a mixed housing market landscape for the four weeks ending June 16. Pending home sales fell by 3.8%, the most significant year-over-year decline in nearly four months. The Redfin Homebuyer Demand Index dropped 17% year over year. Meanwhile, the median U.S. home-sale price rose to a new high of $396,000, up 4.8%. The median monthly mortgage payment stands at $2,781. The weekly average mortgage rate slightly declined to 6.95%, still more than double pandemic lows.

Buyers are gaining negotiating power as more sellers reduce prices. New listings increased by 7.7% year over year but remain historically low. Many listings are sitting unsold for over 30 days. Buyers prefer move-in-ready homes in popular neighborhoods, while homes needing work are often sold below asking price. Indicators suggest potential easing in housing costs due to declining mortgage rates and slower price growth.

Metro-level data shows varying trends, with Newark, NJ, and Anaheim, CA, seeing the highest median sale price increases, while Austin, TX, experienced the most significant decline.

Positive

• Median U.S. home-sale price reached an all-time high of $396,000, up 4.8%.
• The median monthly mortgage payment is $2,781, which is lower than its record high.
• New listings increased by 7.7% year over year.
• The share of homes with price drops increased to the highest level since November 2022, indicating potential easing in housing costs.
• Active listings rose by 16.5% year over year.

Negative

• Pending home sales dropped by 3.8%, the biggest decline in nearly four months.
• The Redfin Homebuyer Demand Index fell 17% year over year.
• New listings remain historically low despite a year-over-year increase.
• Many home listings are sitting on the market for 30 days or longer without going under contract.
• The weekly average mortgage rate, though slightly down, remains significantly higher than pandemic-era lows.

Insights

Financial Analyst

Redfin's report reveals critical dynamics in the housing market, highlighting record-high median sale prices at $396,000 and a 4.8% year-over-year increase. This sets a distinctive tone for home affordability and investment. The rise in median monthly mortgage payments to $2,781 against a backdrop of slightly declining mortgage rates suggests ongoing high costs for buyers despite some easing in rates.

Importantly, the 3.8% decline in pending home sales and a 17% drop in Redfin’s Homebuyer Demand Index signal a cooling market. Fewer buyers are initiating purchases due to affordability concerns, reflecting broader economic pressures.

Potential downturn indicators include an increase in the share of sellers dropping list prices, pointing to price resistance from buyers. However, high levels of stale listings (homes sitting on the market for 30 days or more) indicate sellers might need to adjust expectations further, possibly leading to more significant price reductions.

Implications: For the short term, sellers might face challenges in securing desired prices unless homes are in prime condition. For buyers, this could mean opportunities for better deals, especially on less desirable properties. The broader economic sentiment will closely tie to mortgage rate trends and inflation data, both of which bear significant weight on buyer behavior and market stability.

Market Research Analyst

The housing market's current state, as depicted in Redfin's report, hints at a potential shift in power towards buyers. With 16.5% more active listings year-over-year and 6.6% of homes having price drops, there are signs of softening in a previously hot market. The accumulation of stale listings suggests a mismatch between asking prices and what buyers are willing to pay, reflecting buyer pushback on current prices.

The 5.5% increase in median asking prices year-over-year shows sellers are still optimistic, but the reality of homes selling under asking price, especially those not in top condition, points to a market correction.

Trends to Watch: Monitoring the balance between new listings and buyer demand will be pivotal. If new listings continue to lag behind demand, price drops and longer times on market could become more common, easing the path for potential buyers. Retaining an eye on mortgage rates and buyer demand indices will provide indicators for the market's direction over the coming months.

Housing costs could come down in the coming months, as mortgage rates are coming down a bit and there are signs price growth could slow

SEATTLE--(BUSINESS WIRE)-- (NASDAQ: RDFN) — Pending home sales fell 3.8%, the biggest year-over-year decline in nearly four months, during the four weeks ending June 16. That’s according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.

Buyers are shying away from earlier steps in the house-hunting process, too: Redfin’s Homebuyer Demand Index, a measure of requests for tours and other buying services from Redfin agents, declined 17% year over year to its lowest level since February.

Buyers are backing off largely because housing costs are high. The median U.S. home-sale price is up 4.8% to an all-time high of $396,000, and the median monthly mortgage payment is $2,781, about $60 below its record high. The weekly average mortgage rate declined slightly to 6.95% this week, but it’s still more than double pandemic-era lows.

The irony of near-record-high housing costs: They’re causing buyers to back off, and enough of them have backed off to give buyers who remain more negotiating power for certain homes. The other piece of good news for buyers is that housing costs could come down soon. There are signs that price growth could lose some momentum: The share of sellers dropping their list price is at its highest level since November 2022, and asking-price growth has already slowed. Mortgage rates have fallen a bit since last week’s cooler-than-expected inflation report, and they may continue declining.

New listings are still near historic lows. Another reason for the decline in pending sales is a lack of new, desirable listings for buyers to choose from. New listings are up 7.7% year over year, but they’re sitting well below typical levels for this time of year; the only time on record June listings have been lower was in 2023.

Many home listings are becoming stale, sitting on the market for 30 days or longer without going under contract; Redfin agents report that most buyers are willing to pay sky-high housing costs only for move-in ready homes in popular neighborhoods.

“A few years ago, I never would have told a seller they need to freshen up their paint, fix their furnace and make sure their roof is up to date before putting their home on the market–but now, I tell them to make the house as pretty as they possibly can,” said Des Bourgeois, a Redfin Premier agent in Detroit. “Buyers are still out there and they’re willing to pay today’s high prices, but only if the house is in really good shape. They don’t want to spend extra money on paint or new appliances.”

Homes that need work and/or aren’t in the most desirable locations can be a good opportunity for today’s buyers: They’re selling under asking price in some places–if they do sell. “Things have reversed since the pandemic,” said Jonathan Ader, a Redfin Premier agent in the Palm Springs, CA area. “Now, most homes—the exception is relatively affordable homes that are move-in ready—are selling under asking price.”

For Redfin economists’ takes on the housing market, 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	7.02% (June 18)	Down from 7.16% a week earlier; down from a 5-month high of 7.52% 6 weeks earlier	Up from 6.94%	Mortgage News Daily
Weekly average 30-year fixed mortgage rate	6.95% (week ending June 13)	Down slightly from 7.03% 2 weeks earlier; down from a 5-month high of 7.22% about a month earlier	Up from 6.69%	Freddie Mac
Mortgage-purchase applications (seasonally adjusted)		Increased 2% from a week earlier (as of week ending June 14)	Down 12%	Report about Mortgage Bankers Association data
Redfin Homebuyer Demand Index (seasonally adjusted)		Down 5% from a month earlier to its lowest level since February (as of week ending June 16)	Down 17%	Redfin Homebuyer Demand Index, a measure of requests for tours and other homebuying services from Redfin agents
Touring activity		Up 19% from the start of the year (as of June 17)	At this time last year, it was also up 19% from the start of 2023	ShowingTime, a home touring technology company
Google searches for “home for sale”		Unchanged from a month earlier (as of June 17)	Down 21%	Google Trends

Key housing-market data

U.S. highlights: Four weeks ending June 16, 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 June 16, 2024	Year-over-year change	Notes
Median sale price	$396,000	4.8%	All-time high; biggest increase since March
Median asking price	$411,749	5.5%
Median monthly mortgage payment	$2,781 at a 6.95% mortgage rate	7.8%	$58 below all-time high set during the 4 weeks ending April 28
Pending sales	86,225	-3.8%	Biggest decline in nearly 4 months
New listings	98,527	7.7%
Active listings	942,916	16.5%
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	42.1%	Down from 47%
Median days on market	31	+3 days
Share of homes sold above list price	32.2%	Down from 36%
Share of homes with a price drop	6.6%	+2.1 pts.	Highest level since Nov. 2022
Average sale-to-list price ratio	99.7%	-0.2 pts.

Metro-level highlights: Four weeks ending June 16, 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	Newark, NJ (16.4%) Anaheim, CA (16%) Nassau County, NY (14.7%) New Brunswick, NJ (14.1%) Milwaukee (10.7%)	Austin, TX (-3.7%) San Antonio (-1.5%) Fort Worth, TX (-1.4%) Portland, OR (-1.1%)	Declined in 4 metros
Pending sales	San Jose, CA (13%) Columbus, OH (5.7%) Pittsburgh (5.4%) Anaheim, CA (4.5%) Los Angeles (4.3%)	Houston (-14.5%) West Palm Beach, FL (-12.9%) Miami (-12.3%) New Brunswick, NJ (-10.8%) Atlanta (-10.7%)	Increased in 14 metros
New listings	San Jose, CA (44.1%) Phoenix (23.6%) San Diego (21.4%) Miami (20.5%) Seattle (17.1%)	Chicago (-9.2%) Minneapolis (-6.7%) Atlanta (-5.6%) Newark, NJ (-4.1%) Portland, OR (-3.9%)	Declined in 8 metros

To view the full report, including charts, please visit: https://www.redfin.com/news/housing-market-update-record-high-prices-buyers-gain-power

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/20240620827197/en/

Redfin Journalist Services:

Kenneth Applewhaite

press@redfin.com

Source: Redfin

FAQ

What is the median U.S. home-sale price as of June 16, 2024?

The median U.S. home-sale price reached $396,000, an all-time high.

How much did pending home sales decline for RDFN in June 2024?

Pending home sales for RDFN fell by 3.8% in June 2024.

What is the current Redfin Homebuyer Demand Index?

The Redfin Homebuyer Demand Index is down 17% year over year.

What is the median monthly mortgage payment reported by RDFN?

The median monthly mortgage payment is $2,781.

How have new listings changed for RDFN in June 2024?

New listings increased by 7.7% year over year but remain historically low.

What is the current weekly average mortgage rate according to RDFN?

The current weekly average mortgage rate is 6.95%.

Which metros saw the highest median sale price increase?

Newark, NJ, and Anaheim, CA, saw the highest increases in median sale prices.

Which metro experienced the most significant decline in median sale prices?

Austin, TX, experienced the most significant decline in median sale prices.