Redfin Reports the Typical Home Is Selling for Less Than List Price, the First Time That Has Happened in Late Spring Since Start of Pandemic

Rhea-AI Summary

For the first time since the onset of the pandemic in 2020, the typical U.S. home sold for less than its list price during the four weeks ending June 23, 2024, Redfin reported. Homes sold for 0.3% below asking price, compared to exact list price a year ago. Only 32.3% of homes sold above asking price, the lowest in any June since 2020. Sellers are also dropping prices more frequently, with nearly 7% reducing prices, the highest level since November 2022. New listings increased by 8.2% year-over-year while pending sales dropped 4.3%, the largest decline in four months. Over 60% of homes stayed on the market for at least a month. Median home-sale prices hit an all-time high of $397,250, up 4.9% year-over-year; however, buyers are deterred by high mortgage rates, averaging near 7%. Redfin suggests both buyers and sellers should manage expectations in the current market.

Positive

• Median home-sale price increased 4.9% year-over-year to $397,250, an all-time high.
• New listings rose by 8.2% year-over-year, the biggest increase in two months.

Negative

• Typical homes sold for 0.3% less than asking price, the first time since the pandemic.
• Pending home sales fell 4.3%, the largest decline in four months.
• Only 32.3% of homes sold above list price, the lowest June figure since 2020.
• Nearly 7% of sellers dropped their asking prices, the highest level since November 2022.
• Over 60% of homes have been listed for at least a month without being contracted.
• High mortgage rates, averaging near 7%, deterred buyers, with monthly payments close to record highs.

Insights

Financial Analyst

Recent data from Redfin indicates a significant shift in the U.S. housing market dynamics. The typical home selling for 0.3% below its asking price for the first time since the pandemic signals a cooling in demand. This marks a departure from past years when homes were selling at or above list prices. For investors, this could imply an impending slowdown in home-price growth, impacting companies involved in real estate, construction and related sectors.

The higher number of new listings (8.2% year-over-year increase) coupled with a decline in pending home sales (4.3% decrease) points to a possible oversupply in certain markets. This scenario can lead to longer holding periods for properties, increasing carrying costs for sellers and investors.

Another critical point is the rising median home-sale price, now at an all-time high of $397,250. This increase, despite fewer sales, suggests persistent inflationary pressures on housing. Additionally, the average sale-to-list price ratio dropping to 99.7% from previous highs further supports the notion of diminishing buyer enthusiasm.

Overall, investors should monitor these trends closely as they may impact the profitability of housing-related investments. The potential for a more balanced market (indicated by increasing months of supply) could offer buying opportunities but also pose risks if price corrections occur.

Market Research Analyst

The Redfin report highlights several emerging trends that could reshape the housing market landscape. One noteworthy observation is the geographic variability in market conditions. For instance, while pending sales increased significantly in metros like San Jose (14.7%) and Pittsburgh (5%), they declined sharply in Houston (-15.1%) and West Palm Beach (-14.9%). This disparity suggests that localized factors are increasingly influencing market dynamics.

From a retail investor’s perspective, understanding these regional differences can be vital for making informed investment decisions. Markets with higher price gains, such as Anaheim and Nassau County, may still present growth opportunities. Conversely, regions with declining sales and prices might be approaching a market correction phase.

Additionally, the report underscores the impact of external factors like high mortgage rates (near 7%) and record-breaking heat on buyer behavior. These factors not only affect immediate purchasing decisions but also longer-term market stability. Potential shifts in mortgage rates, as hinted by the report, could further alter market momentum, making it essential for investors to stay updated on macroeconomic indicators.

High housing costs—and high temperatures—are keeping prospective homebuyers on the sidelines, making it more common for homes to sell below list price. This could be a sign that home-price growth will lose momentum in the coming months.

SEATTLE--(BUSINESS WIRE)-- (NASDAQ: RDFN) — The typical U.S. home that sold during the four weeks ending June 23 sold for 0.3% less than its asking price, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. This marks the first time the typical home has sold under list price this time of year since the onset of the pandemic in 2020, when the housing market nearly ground to a halt. The typical home sold for exactly its list price one year ago, and roughly 2% above its list price two years ago.

Additionally, just under two-thirds (32.3%) of U.S. homes sold over asking price during that period. That’s the lowest share of any June since 2020, and down from 36% a year earlier. Nearly 7% of home sellers dropped their asking price, on average, the highest level since November 2022 and up from 4.7% a year ago.

The likelihood of homes selling below asking price is rising because there’s more supply than demand, at least for certain types of homes in certain parts of the country. New listings are up 8.2% year over year nationwide, while pending home sales are down 4.3%, the biggest decline in four months. Most inventory is growing stale; over 60% of homes are listed for at least a month without going under contract.

Buyers are shying away due to sky-high housing costs. The median home-sale price is up 4.9% year over year to an all-time high of $397,250. While mortgage rates have come down from May’s six-month high, the weekly average is still near 7%. The typical homebuyer’s monthly payment is $2,785, just about $50 below the record high.

Record-breaking heat is another reason some buyers have taken a backseat recently. “I’ve heard some clients say, ‘it’s so hot outside I don’t want to see anything,’” said Joe Hunt, a Redfin manager in Phoenix. “But if mortgage rates were lower, I doubt heat would be keeping buyers away.”

Buyers may get a slight respite soon on costs soon. The growing likelihood that homes sell below asking price, along with the high share of sellers dropping their prices, could mean sale-price growth loses momentum. Plus, mortgage rates may decrease further if inflation continues to cool.

Redfin agents say both buyers and sellers should be realistic about prices in today’s market. Sellers shouldn’t overprice, and buyers should know they may be able to negotiate— but only if a home has been on the market without much activity for at least a few weeks.

“Some buyers think they can get a deal because they’re hearing the market is cool, and some sellers think every home will sell for top dollar no matter the condition,” said Marije Kruythoff, a Los Angeles Redfin Premier agent. “In reality, everything depends on the house and the location. The hottest properties in this area are either move-in ready or complete fixer-uppers. The homes in between, those that are pretty nice but not updated, are sitting on the market longest. Sellers of that type of home often benefit from making cosmetic repairs before listing, which we offer through Redfin Concierge Service. And buyers who do encounter middle-of-the-road listings without much wow factor should consider trying to negotiate.”

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	7.06% (June 26)	Up from a 3-month low of 6.97% a week earlier, but down from a 5-month high of 7.52% 6 weeks earlier	Up from 6.91%	Mortgage News Daily
Weekly average 30-year fixed mortgage rate	6.87% (week ending June 20)	Lowest level since week ending April 4	Up from 6.67%	Freddie Mac
Mortgage-purchase applications (seasonally adjusted)		Increased 1% from a week earlier (as of week ending June 21)	Down 13%	Mortgage Bankers Association
Redfin Homebuyer Demand Index (seasonally adjusted)		Up 5% from a month earlier (as of week ending June 23)	Down 14%	Redfin Homebuyer Demand Index, a measure of requests for tours and other homebuying services from Redfin agents
Touring activity		Up 27% from the start of the year (as of June 23)	At this time last year, it was also up 15% 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 24)	Down 15%	Google Trends

Key housing-market data
U.S. highlights: Four weeks ending June 23, 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 23, 2024	Year-over-year change	Notes
Median sale price	$397,250	4.9%	All-time high; biggest increase since March
Median asking price	$414,975	6.1%	Biggest increase since October 2022
Median monthly mortgage payment	$2,785 at a 6.87% mortgage rate	7.5%	$54 below all-time high set during the 4 weeks ending April 28
Pending sales	85,246	-4.3%	Biggest decline in 4 months
New listings	100,545	8.2%	Biggest increase in 2 months
Active listings	953,300	16.9%
Months of supply	3.3	+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	41.4%	Down from 46%
Median days on market	31	+4 days
Share of homes sold above list price	32.3%	Down from 36%
Share of homes with a price drop	6.7%	+2 pts.	Highest level since November 2022
Average sale-to- list price ratio	99.7%	-0.3 pts.

Metro-level highlights: Four weeks ending June 23, 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 (16%) Nassau County, NY (14.4%) New Brunswick, NJ (13.8%) Newark, NJ (13.6%) West Palm Beach, FL (12.7%)	San Antonio (-2.5%) Austin, TX (-2.5%) Dallas (-0.9%) Fort Worth, TX (-0.8%)	Declined in 4 metros
Pending sales	San Jose, CA (14.7%) Pittsburgh (5%) San Francisco (4.5%) Anaheim, CA (3.4%) Columbus, OH (2.7%)	Houston (-15.1%) West Palm Beach, FL (-14.9%) Atlanta (-12.2%) San Antonio (-11.4%) Miami (-11.2%)	Increased in 11 metros
New listings	San Jose, CA (40.6%) Miami (22.4%) San Diego (20.8%) Anaheim, CA (19.3%) Phoenix (19.2%)	Chicago (-7.6%) Atlanta (-7.5%) Detroit (-2%) Minneapolis (-0.8%) Portland, OR (-0.4%)	Declined in 5 metros

To view the full report, including charts, please visit:

https://www.redfin.com/news/housing-market-update-homes-selling-below-asking-price-june-2024

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/20240627936271/en/

Redfin Journalist Services:

Kenneth Applewhaite

press@redfin.com

Source: Redfin

FAQ

What is the latest trend in U.S. home sales according to Redfin?

Redfin reports that for the first time since the pandemic, U.S. homes are selling for less than their list prices during late spring.

How much less are homes selling for compared to their list price?

Homes sold for 0.3% less than their asking price during the four weeks ending June 23, 2024.

How does the current percentage of homes sold above list price compare to previous years?

Only 32.3% of homes sold above list price, the lowest share for any June since 2020.

What is the median home-sale price as of June 2024?

The median home-sale price reached an all-time high of $397,250, up 4.9% year-over-year.

How have new listings and pending home sales changed year-over-year?

New listings increased by 8.2%, while pending home sales declined by 4.3%, the largest drop in four months.

What are the current mortgage rates affecting homebuyers?

Mortgage rates are averaging near 7%, leading to high monthly payments and deterring buyers.

Why are homes staying longer on the market?

Over 60% of homes remain listed for at least a month due to high housing costs and mortgage rates.

What factors are leading to reduced sale prices for homes?

Increased supply, reduced demand, and high mortgage rates are causing homes to sell below asking prices.