Median home sale prices in July were flat for the first time since early March of 202. The five-month streak of record-setting home prices appears to have ended.
Trends for Prices, Sales and New Listings Beginning to Resemble Pre-Pandemic Norms
Can you believe it? The housing market is starting to look pre-pandemic “normal.” Even though home prices were up +18% y/y in the four-week period ending July 25, prices actually fell slightly by -0.2%, according to Redfin.
Competition and sales pace appear to have plateaued with “just” 54% of homes selling over list price and about 60% of homes going under contract within two weeks. Pending sales fell and new listings climbed. The icing on the cake during the four week period ending July 25 was that interest rates were below 2.8% and even that low level did NOT cause buyers to frenetically purchase whatever was available for whatever price.
According to Daryl Fairweather, Chief Economist with Redfin, “Although homes are much pricier than they were before the pandemic, homebuyers now have the benefit of very low mortgage rates and a little less competition than they faced earlier in the summer. This week a young first-time buyer with an FHA loan had her offer accepted on a home near Myrtle Beach SC, after losing out in five bidding wars. I am hopeful that more opportunities like this will arise in the coming weeks if things begin to stabilize.”
Key Market Take-Aways for 400+ Metro Areas
The median home sale price increased +18% to $362,750 BUT decreased =0.2% during the four-week period ending July 25.
Asking prices of newly listed homes were +12% y/y to $358,475 BUT also down -1% from their all-time high in June 2021.
Pending home sales increased just +3% y/y, the smallest y/y increase since the end of June 2020. Pending home sales decreased -12% from their peak in May 2021.
Active listings increased +13% from their 2021 low hit during the beginning of March.
This was the first time that 49.7%, NOT 50%+, of homes that went under contract had an accepted offer within two weeks. Prior to these four weeks ending July 27,the race to go under contract was lighting fast.
The share of for-sale homes with price drops was 4.9% in 2019…the share of for-sale homes with price drops at the end of July 2021 was 4.7%.
Mortgage purchase applications ending July 30 dropped -1.7% w/w to their lowest levels since May 2020. For the week ending August 5, 30-year mortgage rates dropped to 2.77%, the lowest since mid-February of this year.
Redfin’s Homebuyer Demand Index increased +8% m/m.
Thanks to Redfin