Redfin Reports Home Purchases Fell Through at the Highest Rate in Nearly a Year in August
- Median U.S. home sale price rose 3% YoY to $420,846 in August
- Residential real estate deals falling through at highest rate in almost a year due to high mortgage rates
Some homebuyers got cold feet as mortgage rates hit the highest level in over two decades and prices continued to rise, but buyer demand and new listings have stabilized following months of declines
Nationwide, nearly 60,000 home-purchase agreements were canceled in August, equal to
The average interest rate on a 30-year-fixed mortgage was
“I’ve seen more homebuyers cancel deals in the last six months than I’ve seen at any point during my 24 years of working in real estate. They’re getting cold feet,” said Jaime Moore, a Redfin Premier real estate agent in
Home Prices Post Biggest Increase in Almost a Year
The median
Activity in the housing market is sluggish due to rising mortgage rates, but prices remain high because the buyers who are out there are competing for a limited number of homes.
“Home prices will likely remain elevated for the foreseeable future,” said Redfin Economics Research Lead Chen Zhao. “The Federal Reserve still has more work to do in its battle against inflation, which means mortgage rates are unlikely to come down anytime soon. As long as rates remain high, homeowners will be reluctant to sell. And that lack of homes for sale will keep prices high because it means buyers are duking it out for a limited supply of houses.”
Home prices also posted a year-over-year gain in August due to the “base effect” from a year earlier; in August 2022, prices had recently started descending from their record high, which is contributing to the size of year-over-year increases we’re seeing now.
Buyer Demand Is Below Pre-Pandemic Levels, But No Longer in Freefall
Pending sales declined
Pending sales have stabilized as the initial shock of elevated mortgage rates has moved further into the rearview mirror, but high housing costs are still keeping many buyers on the sidelines.
New Listings Tick Up Slightly, But Overall Housing Supply Remains at Record Low
New listings rose
“New listings have likely bottomed out,” Zhao said. “Most of the homeowners who feel handcuffed by high rates have already made the decision not to sell. That means many of today’s sellers are putting their homes on the market because they have to, in some cases due to divorce, family emergencies or return-to-office policies.”
Still, the total number of homes for sale hit a record low in August, falling
Housing supply is at an all-time low because homeowners feel locked in to their low mortgage rates; for many, selling their home and buying a new one would mean taking on a much higher monthly payment.
August 2023 Highlights:
|
August 2023 |
Month-Over-Month Change |
Year-Over-Year Change |
Median sale price |
|
- |
|
Pending sales, seasonally adjusted |
381,192 |
- |
- |
Homes sold, seasonally adjusted |
409,217 |
- |
- |
New listings, seasonally adjusted |
474,239 |
|
- |
All homes for sale, seasonally adjusted (active listings) |
1,301,871 |
- |
- |
Months of supply |
2 |
-0.2 |
-0.2 |
Median days on market |
30 |
1 |
4 |
Share of for-sale homes with a price drop |
|
2.2 ppts |
-1.7 ppts |
Share of homes sold above final list price |
|
-2.0 ppts |
-1.5 ppts |
Average sale-to-final-list-price ratio |
|
-0.2 ppts |
0.0 ppts |
Pending sales that fell out of contract, as % of overall pending sales |
|
0.5 ppts |
1.4 ppts |
Average 30-year fixed mortgage rate |
|
0.23 ppts |
1.85 ppts |
Metro-Level Highlights: August 2023
-
Pending sales: In
Boise, ID , pending sales fell70.5% year over year, more than any other metro Redfin analyzed. Next cameHartford, CT (-57.3% ) andNew Haven, CT (-55.8% ). Only two metros saw increases:Rochester, NY (0.9% ) andMcAllen, TX (0.5% ). The smallest decline was inDetroit (-1.8% ). -
Closed sales: In
Bridgeport, CT , closed home sales dropped25.9% year over year, more than any other metro Redfin analyzed. Next cameStockton, CA (-25.8% ) andTacoma, WA (-25.7% ). Closed sales rose in just one metro—Las Vegas (1.4% )—and fell least inNorth Port, FL (-0.1% ) andPhoenix (-2.9% ). -
Prices: Median sale prices rose most from a year earlier in
Newark, NJ (16.7% ),Miami (14.6% ) andRochester (14.3% ). They fell in 15 metros, with the steepest declines inAustin, TX (-7% ),Boise (-5.8% ) andFort Worth, TX (-2.7% ). -
Listings: New listings fell most from a year earlier in
Hartford (-46.7% ),Allentown, PA (-46.6% ) andNew Haven (-38.8% ). They rose in five metros, with the biggest increases inNorth Port (6% ),McAllen (2.4% ) andAlbany, NY (2.2% ). -
Supply: Active listings fell most from a year earlier in
Boise (-45.5% ),Allentown (-45.4% ) andBridgeport (-45.1% ). They climbed in six metros, with the biggest jumps inNew Orleans (28.8% ),McAllen (25.9% ) andNorth Port (13.7% ). -
Competition: In
Rochester ,77.1% of homes sold above their final list price, the highest share among the metros Redfin analyzed. Next cameHartford (71.9% ) andBuffalo, NY (69.6% ). The shares were lowest inNorth Port (7.7% ),Cape Coral, FL (10.6% ) andWest Palm Beach, FL (13% ). -
Speed: The fastest market was
Grand Rapids, MI , where the typical home went under contract in seven days. Next cameCincinnati (8) andSeattle (8). The slowest markets wereNew Orleans (61),Honolulu (60) andWest Palm Beach (60).
To view the full report, including charts, please visit:
https://www.redfin.com/news/housing-market-tracker-august-2023
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Source: Redfin