Despite surging median home prices, the housing market is beginning to show signs of slowing.
Market Cooldown In Home Sales
Home sales dropped -4% m/m and -8% y/y in March 2022, according to a recent report from Redfin. Likewise, in the 88 largest metros tracked by Redfin, home sales dropped in 79 of those metros.
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Metro markets see the biggest sales decline during March included:
- North Point FL – -30%
- West Palm Beach FL – -24%
- Lake County IL – -21%
Markets with the largest share of homes predicted to sell at or below list price included:
- Miami FL – 45.7%
- Batton Rouge LA – 41.1%
- Fort Lauderdale FL – 35.0%
On the other end of the spectrum, metros that saw the largest sales growth y/y in March included:
- Fresno CA – +6.1%
- Philadelphia PA – +5.8%
- Oxnard CA – +3.3%
Median Home Sale Price Jumped +6.2% in March
According to this recent Redfin report, median home prices increased +17.3% y/y in March and by +6.2% m/m, the fastest monthly increase during the same time period of the year since 2013.
Though the number of home sales fell in March, all 88 of the metro markets Redfin tracks saw their respective median sale prices increase during March.
Markets with the highest sale price increases included:
- Tampa FL – +29%
- Phoenix AZ – +27.4%
- McAllen TX – +27.3%
- Raleigh NC – +27.2%
- Las Vegas NV – +27.2%
Metro markets predicted to have the largest share of homes to sell at or above list price included:
- Oakland CA – 93.3%
- Seattle WA – 93.3%
- San Jose CA – 92.5%
Active Listings Down in 82 of 88 Metro Markets
The number of seasonally adjusted homes for sale in March fell by-12.6% y/y. Redfin pointed to 82 of 88 metro markets that saw active listings decline.
Markets with the biggest year-over-year declines in active housing supply in March included:
- Allentown PA – -47%
- Greensboro NC – -41%
- Lauderdale FA – -37%
The only metros where the number of listings for available homes to buy increased included:
- Elgin IL – +29%
- Chicago IL – +13%
- Detroit MI – +13%
- Lake County IL – +5%
Possible Effects of Rising Interest Rates
Daryl Fairweather, Redfin’s Chief Economist, made no bones about how rising interest may impact the homebuying AND home selling public. Fairweather said, “We expect the combination of surging mortgage rates and record-high home prices to cause more homebuyers to drop out of the market.”
Fairweather added, “Unfortunately, homeowners are turning their backs on the market too. Instead of being motivated to list before prices weaken, potential home sellers may be choosing to wait-out the impending market cooldown.”
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Thanks to Redfin.