Redfin Reports U.S. Home Prices Hit New All-Time High, Pushing Pending Sales Down 5%

Rhea-AI Summary

Redfin reports that U.S. home prices have hit a new all-time high with a 5% year-over-year increase, reaching a median sale price of $397,954 as of June 30, 2024. Concurrently, pending home sales declined by 4.6%, marking the largest drop since February. New listings rose by 10%, the biggest jump in two months. Mortgage rates have shown a slight decline, resulting in a $100 decrease in monthly housing payments compared to their April peak. Key metrics such as the Redfin Homebuyer Demand Index and Google searches for 'home for sale' have also shown decreases.

Some metro areas like Anaheim, CA, and Newark, NJ, saw significant increases in median sale prices, while others like Austin, TX, experienced declines. Pending sales saw the largest increases in San Jose, CA, and the largest decreases in West Palm Beach, FL. The report also highlights a notable rise in new listings in metros like San Jose and Seattle.

Positive

• Median sale price increased by 5% year-over-year, reaching $397,954, an all-time high.
• New listings rose by 10%, marking the biggest increase in two months.

Negative

• Pending home sales dropped by 4.6%, the largest decline since February.
• Google searches for 'home for sale' down 4% from a month earlier.
• Redfin Homebuyer Demand Index down 17% year-over-year.

Insights

Financial Analyst

The recent report from Redfin reveals a mixed bag for the U.S. housing market. The record-high median sale price of $397,954, up 4.9% year-over-year, indicates robust demand and limited supply. However, the decline in pending home sales by 4.6% and a drop in mortgage-purchase applications by 3% suggest that higher home prices and fluctuating mortgage rates might be deterring potential buyers. Mortgage rates are down from their peak but still relatively high compared to historical norms, which could be influencing buyer behavior.

In the short-term, we might see continued pressure on home affordability, potentially cooling the market further. In the long-term, sustained high prices could lead to more listings as homeowners try to capitalize on the market, potentially rebalancing supply and demand.

For investors, this could mean a period of volatility in real estate stocks, including Redfin (NASDAQ: RDFN). While high home prices can boost brokerage revenues, declining sales volumes might offset these gains. Retail investors should watch mortgage rate trends closely as they can significantly influence market dynamics.

Market Research Analyst

The data provided by Redfin points to a classic scenario of a seller’s market, characterized by a median days on market of 32 and 41.6% of homes going off-market within two weeks. These figures illustrate strong buyer interest despite higher prices. However, the 17.5% increase in active listings suggests that more sellers are entering the market, perhaps anticipating that prices might peak soon.

Interestingly, there are regional disparities worth noting. For instance, San Jose and San Francisco show significant increases in pending sales, while Atlanta and Miami show substantial declines. This could be reflective of local economic conditions and job market health, influencing how different markets react to national trends.

For investors, understanding these regional nuances can offer opportunities for targeted investments in markets showing healthy growth. However, the overall cooling effect seen in some metrics indicates that a cautious approach may be warranted.

Mortgage Expert

The report on mortgage rates provides critical insights into the housing market's trajectory. The 30-year fixed mortgage rate has seen some fluctuations, with a recent average of 6.86%. This is down from a 5-month high but still notably high compared to last year. High mortgage rates typically reduce buyer affordability, translating into fewer mortgage applications, evident from the 12% year-over-year decline.

For potential buyers, the recent reduction in rates might offer some relief, but the overall high level may still be a significant barrier. For investors, the rate trends are a key variable; declining rates could spur market activity, while any upward movement might dampen demand further.

Investors should monitor Federal Reserve policies closely, as any changes could significantly impact mortgage rates and, by extension, the housing market.

The good news for prospective buyers: There are more new listings to choose from, and monthly housing payments are down nearly $100 from their April peak as mortgage rates decline.

SEATTLE--(BUSINESS WIRE)-- (NASDAQ: RDFN) — Pending home sales posted their biggest decline since February during the four weeks ending June 30, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. The median sale price rose 5% from a year ago, hitting an all-time high. New listings jumped 10%.

Redfin issued a shortened report due to the Fourth of July holiday; full data is provided below:

For Redfin economists’ takes on the housing market, please visit Redfin’s “From Our Economists” page.

Leading indicators

Indicators of homebuying demand and activity
Daily average 30-year fixed mortgage rate	7.13% (July 2)	Up from a 3-month low of 6.97% three weeks earlier, but down from a 5-month high of 7.52% in early May	Up from 7.03%	Mortgage News Daily
Weekly average 30-year fixed mortgage rate	6.86% (week ending June 27)	4th straight week of declines; lowest level since week ending April 4	Up from 6.71%	Freddie Mac
Mortgage-purchase applications (seasonally adjusted)		Decreased 3% from a week earlier (as of week ending June 28)	Down 12%	Mortgage Bankers Association
Redfin Homebuyer Demand Index (seasonally adjusted)		Essentially unchanged from a month earlier (as of week ending June 30)	Down 17%	Redfin Homebuyer Demand Index, a measure of requests for tours and other homebuying services from Redfin agents
Touring activity		Up 21% from the start of the year (as of June 30)	At this time last year, it was also up 11% from the start of 2023	ShowingTime, a home touring technology company
Google searches for “home for sale”		Down 4% from a month earlier (as of July 1)	Down 20%	Google Trends
Daily average 30-year fixed mortgage rate	7.13% (July 2)	Up from a 3-month low of 6.97% three weeks earlier, but down from a 5-month high of 7.52% in early May	Up from 7.03%	Mortgage News Daily

Key housing-market data

U.S. highlights: Four weeks ending June 30, 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 30, 2024	Year-over-year change	Notes
Median sale price	$397,954	4.9%	All-time high; biggest increase since March
Median asking price	$409,975	6.1%	Biggest increase since October 2022
Median monthly mortgage payment	$2,749 at a 6.86% mortgage rate	6.5%	$88 below all-time high set during the 4 weeks ending April 28
Pending sales	87,160	-4.6%	Biggest decline in 4 months
New listings	100,989	9.9%	Biggest increase in 2 months
Active listings	967,516	17.5%
Months of supply	3.3	+0.7 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	41.6%	Down from 47%
Median days on market	32	+5 days
Share of homes sold above list price	32.3%	Down from 36%
Share of homes with a price drop	6.9%	+2.1 pts.	Highest level on record
Average sale-to-list price ratio	99.7%	-0.3 pts.

Metro-level highlights: Four weeks ending June 30, 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 (14.7%) Newark, NJ (13.5%) Nassau County, NY (12.6%) New Brunswick, NJ (11.7%) Fort Lauderdale, FL (11.1%)	Austin, TX (-2.1%) Dallas (-1.5%) San Antonio (-0.2%)	Declined in 3 metros
Pending sales	San Jose, CA (18.2%) San Francisco (6.1%) Pittsburgh (4.8%) Providence, RI (2.8%) Boston (2.2%)	West Palm Beach, FL (-16.4%) Houston (-13.4%) Atlanta (-12%) Miami (-11.7%) Minneapolis (-10.7%)	Increased in 9 metros
New listings	San Jose, CA (49.2%) Seattle (28.7%) Miami (24.8%) Boston (24.3%) Montgomery County, PA (22.2%)	Atlanta (-7.7%) Detroit (-0.4%)	Declined in 2 metros

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

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/20240703170891/en/

Redfin Journalist Services:

Kenneth Applewhaite

press@redfin.com

Source: Redfin

FAQ

What is the median sale price of homes according to Redfin's latest report?

The median sale price of homes is $397,954 as of June 30, 2024, a 5% year-over-year increase.

How have pending home sales changed according to Redfin's latest data?

Pending home sales have declined by 4.6%, the largest drop since February.

Which metro areas saw the largest increase in median sale prices?

Anaheim, CA, and Newark, NJ, saw the largest increases in median sale prices, at 14.7% and 13.5% respectively.

How have mortgage rates changed according to Redfin's latest report?

The daily average 30-year fixed mortgage rate fell to 7.13% as of July 2, down from a 5-month high of 7.52% in early May.

What is the Redfin Homebuyer Demand Index and how has it changed?

The Redfin Homebuyer Demand Index, which measures requests for tours and homebuying services, is down 17% year-over-year.

How have new listings changed in the latest Redfin report?

New listings increased by 10%, the biggest jump in two months, with significant rises in metros like San Jose and Seattle.