Lending reports

Redfin reports share of homes with price cuts hits new high as mortgage rates hit 2008 levels

Rising mortgage rates and Fed actions to fight inflation will further stretch homebuyers’ budgets and encourage more homeowners to stay put

SEATTLE, June 16, 2022–(BUSINESS WIRE)–(NASDAQ:RDFN) — The highest proportion of sellers on record lowered their list price in the four weeks ending June 12, according to a new report by Redfin (redfin.com), technology-powered real estate brokerage. This happened as mortgage rates soared to levels not seen since 2008, shrinking the pool of home buyers.

Yet buying a home has never been so expensive. The typical buyer with a 30-year fixed rate mortgage is looking at a monthly payment of $2,514, up from $1,692 a year ago. But those who remain in the market may notice that they face less competition from other buyers. Homes are more likely to stay on the market for a few weeks, compared to last year when they would be contracted within the week, and home prices are rising less often than they were earlier in the spring.

“The housing market is not collapsing, but it is experiencing a hangover as it descends from an unsustainable high,” said Redfin deputy chief economist Taylor Marr. “Housing demand has already cooled considerably to the point that the industry has begun to face layoffs. This week’s rate hikes will further stretch homebuyers’ budgets to the point that many more may “be overpriced. With many home sellers already lowering prices, more homeowners are likely to decide to stay put now that the mortgage rate on a new home is significantly higher than the one they currently occupy.”

“If it weren’t for the surge in mortgage rates, the housing market would still be booming right now,” said James Cappello, Redfin Bay Area real estate agent. “Homebuyer demand was still extremely high in February, but rates are making it very difficult. Going from 3% to almost 6% almost instantly scared a lot of people out of the market.”

Leading Indicators of Home Buying Activity:

  • For the week ending June 16, 30-year mortgage rates hit 5.78%, the highest level since November 2008 and the biggest one-week increase since 1987.

  • About the same number of people searched for “homes for sale” on Google – searches in the week ending June 11 were flat on the previous year.

  • The seasonally adjusted Redfin Homebuyer Demand Index – a measure of requests for home visits and other home buying services from Redfin agents – was down 14% year over year. another during the week ending June 12. index.

  • Touring activity as of June 12 was 3% higher at the start of the year, compared with 29% at the same time last year, according to home touring technology company ShowingTime.

  • Mortgage purchase requests were down 16% from a year earlier, while the seasonally adjusted index rose 8% week-over-week in the week ending June 10 .

Housing Market Highlights for 400+ U.S. Metro Areas:

Unless otherwise specified, this data covers the four-week period ending June 12. Redfin’s weekly housing market data dates back to 2015.

  • The median home sale price rose 14% year over year to a record high of $399,806.

  • The median asking price for newly listed homes rose 16% year over year to $409,251.

  • The monthly mortgage payment on the median asking price has increased to $2,514 at the current mortgage rate of 5.78%. This is a 49% increase from $1,692 a year earlier, when mortgage rates were 2.93%.

  • Pending home sales were down 8% year-over-year, matching the drop seen in May 2020.

  • New home listings for sale were down 1% from the previous year.

  • Active listings (the number of homes listed for sale at any time during the period) fell 6% year over year, the smallest decline since December 2019.

  • 50% of homes that have been under contract had an offer accepted within the first two weeks on the market, compared to 51% a year earlier.

  • 35% of homes under contract had an offer accepted within a week of being put on the market, compared to 38% a year earlier.

  • Homes sold were on the market for a median of 16 days, up from 18 days a year earlier and up slightly from the record low of 15 days set in May and early June.

  • 56% of homes sold above the list price, compared to 53% a year earlier.

  • On average, 5.6% of homes for sale each week experienced a price drop, a record as far back as data goes, through early 2015. In other words, 22.4% of homes for sale throughout the four-week period had a price drop.

  • The average sale price to listing price ratio, which measures how well homes are selling relative to their asking price, fell slightly to 102.5%. In other words, the average home sold for 2.5% above its asking price. This figure was 102% a year earlier.

To view the full report, including charts and methodology, please visit: https://www.redfin.com/news/housing-market-update-price-drops-hit-new-record/

About Redfin

Redfin(www.redfin.com) is a technology-driven real estate company. We help people find a home with brokerage, instant home buying (iBuying), rental, loan, title insurance, and home improvement services. We sell houses for more money and charge half the fees. We also run the #1 real estate brokerage site in the country. Our homebuyer clients see homes first with on-demand viewings, and our loan and title services help them close quickly. Customers selling a home can receive an instant cash offer from Redfin or have our renovation team repair their home to sell for the best price. Our rental business helps millions of people across the country find apartments and houses for rent. Since launching in 2006, we’ve saved our clients over $1 billion in commissions. We serve more than 100 markets in the United States and Canada and employ more than 6,000 people.

For more information or to contact a local Redfin estate agent, visit www.redfin.com. To learn more about housing market trends and download data, visit Redfin Data Center. To be added to Redfin’s press release mailing list, email [email protected] To see Redfin’s press center, Click here.

See the source version on businesswire.com: https://www.businesswire.com/news/home/20220616005899/en/

contacts

Services for Redfin journalists:
Kenneth Applewhite, 206-588-6863
[email protected]